The Council of Mortgage of Lenders report s that the number of mortgages, taken out in the UK this September, reached its lowest point in the last 10 years.
Due to insecurity on side of house owners stemming from recent government announcements to plan the reduction of the public sector budget, the CML draws a warning résumé. Gross lending increased 9% within one year and was at a lower amount than the current £12bn a whole decade ago.
The affected mortgage broker, Brian Murphy, says: "September's figures are a shocker – down on August, usually the quietest month of the year, down on last September when we were still in the grips of recession, and no sign of the traditional post-summer bounce in mortgage activity which doesn't bode well for the rest of the year and early 2011."
The prediction on future- lending volumes stays to be negative as the planned government cuts might soon be implemented and the burden on lenders is not likely to decrease.
A consequence of the lending decrease might be an accelerated subsidence trend of house prices. As more houses will be offered on the market, the amount of willing buyers of a new house might be outweighed. The fall of house prices of 3.6% was recently reported in Halifax.