As most of the financial parts of this economy, mortgage lending is also having some rough times, according to the Council of Mortgage Lenders (CML). They claim that there has been a drop of 52% compared with the same month, one year ago.These recently shown figures say that the total gross lending of January is at its lowest level since April 2001, after falling by 8% from December to January.
Although people are having problems finding a suitable mortgage lending, there does seem to be an increased level of interest from potential buyers, claims the Royal Institution of Chartered Surveyors (Rics). The number of mortgages taken out by people, mostly families, to buy property had now reached a 34-year low during 2008, mainly due to the house prices which fell by 10,2%.
The CML thinks that it’s rather unrealistic to expect a meaningful revival in lending for the upcoming months. That’s probably why the Bank of England base rates to a record low.
People are having problems getting a mortgage, it’s very difficult, and even if the government can get the banks to step up their lending’s, and they increasingly take effect, it will definitely take a lot of time to regain the confidence.
It has been said that this is the ideal time to invest in properties, but of course most people need a mortgage to be able to buy theirs, which doesn’t make life any easier.
I think the government needs to make sure to let the people know that it’s safe to get a mortgage. As soon as there is more confidence, there will be more mortgages necessary, but of course the prices will remain at a rather low level.
Source: http://www.guardian.co.uk/money/2009/feb/19/mortgage-lending-falls-january
Written by Tom Baeyens,
Student at Artevelde College
2FI2
