Mortgage Lending Inc
Mortgage Lending for 2007 Hit Record Levels
Despite lagging off towards the end of the year, gross mortgage lending hit record levels in 2007, according to figures released by the Council of Mortgage Lenders (CML).
Although the organization is warning that the market has weakened, the reported gross lending total of £ 362billion in 2007. That was well above the anticipated final figures for the year, and five percent higher than the total lending for 2006.
But the CML warned that gross mortgage approvals fell sharply in late years as the global credit crunch entered its fourth month. As a result, lenders limit the amount they are willing to borrow and deprivation of many types of UK Mortgages, especially buy-to-let and self certification products. It is apparent in the figures for gross lending in December 2007, of £ 22.6billion was down to 25% from the November total, and is the lowest recorded monthly amount since May 2005.
Director General of the CML Michael Coogan speech the BBC said that the recent decline in interbank lending rates and the prospect of further reductions in base rates during 2008 to support the market, although lending volumes are likely to remain weak over the next few months. He also said that despite the funding constraints caused by global economic conditions, the UK mortgage market remains very competitive, and provide bargains for a better risk borrowers.
But although there is still a thriving market for those who considered a good risk, anyone who has an excellent credit record probably will be denied further loans and could struggle to achieve a competitive mortgages held by banks and savings banks adopt a very risk-averse approach to their lending.
There is further evidence that the housing market is actually weakening of inspectors and estate agents. The Royal Institution of Chartered Surveyors (RICS) is concerned that real estate prices falling at a rate not seen since the 1990s housing crash, with 49% of its members reported more falls than rises in December, the worst recorded since November 1992.
Real Right Moves have also reported that asking prices for properties in England and Wales fell for the third month in a row, and recent research from financial giants Halifax and Nationwide showed that the annual price growth has slowed to around 5%.
To get an idea of how weak the market is becoming, you can compare mortgages granted in December against the number approved in November, down a staggering 25% in just a month.
Most analysts believe it will take a lot more than one interest rate cut in January for the market to recover to anywhere near the mid-2006 level, and they keep their fingers crossed that the market has not concluded a meltdown.
About the Author
Adam Singleton is an online, freelance journalist and keen gardener. He lives in Scotland with his two dogs.