Mortgage Lending Increases In November
The lending of mortgages took a positive turn towards the end of 2011, according to mortgage lenders.
The Council of Mortgage Lenders (CML) has reported that the number of loans being made to home buyers in the UK rose by 4 per cent in November, to 47,000.
This number is also higher than the previous year, with November 2010 coming in at 3 per cent less than 2011.
Director General of the CML, Paul Smee, has said “a rise in mortgage lending towards the end of 2011 is a welcome indicator for the industry considering the confidence has been week due to fragile economies, both at home and in the eurozone.
“We should expect a further increase in first-time buyers activity over the next few months as they push their purchases to take advantage of the stamp duty concession before it ends in March.”
This exemption was put in place back in November by the government and will come to an end on 24 March 2012.
Between these dates first-time buyers will be free from the 1 per cent stamp duty on any home costing less than £250,000.
However, it’s not all good news, as it is still very difficult to obtain a mortgage. This means that sales are still at less than half the number they were before the economic crisis back in 2007.
The Bank of England’s (BoE) quarterly survey of lending activities has shown that lenders are becoming very particular when it comes to prospective customers.
A spokes person for the BoE said: “Lenders expected a tightening of credit scoring criteria for granting new secured loans to households.
“Factors such as the cost and availability of funds, the economic outlook and expectations for house prices were all expected to pull down on credit availability.
“Lenders expected the proportion of total loan applications being approved to fall over the coming quarter with some lenders commenting that they had revised down expectations for households’ disposable incomes and hence the affordability of taking out new secured loans,” concluded the BoE representative.
Time will tell whether or not 2012 will see a further increase in the sales of mortgages.
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