February 22, 2010

Mortgage Borrowing Slows But There Are Still Signs To Be Cheerful

Mortgage borrowing slowed down in January 2010, according to mortgage lenders, but there are still plenty of reasons to be cheerful about prospects for UK mortgages in 2010.

According to the Council of Mortgage Lenders, gross mortgage lending declined to an estimated £9.1bn in January, a 32% fall from £13.4bn in December and a 21% fall from £11.5bn in January 2009.

The CML admits that a decline is typically experienced between December and January, however this is the lowest monthly total since February 2000 and the lowest January total since 2000.

CML economist Paul Samter says: "We remain in a period of uncertainty for the housing market and economy at large. The market certainly improved over the second half of last year and started 2010 in better shape than most would have predicted twelve months ago. Also, the Bank of England is likely to keep rates low which should continue to mitigate mortgage payment problems and help cushion borrowers from the worst of the recession."

It's not all bad news. After the 2009 we all had these figures are still respectable. Lenders are still offering home loans to plenty of people and rates are still low meaning those who are managing a mortgage can do with relative ease.

David Newnes, managing director of Your Move Estate Agents, says: “This is not quite the cold shower on the housing market it may seem. December was artificially boosted by a mini rush of activity prior to the end of the stamp duty holiday, so January represents a natural correction after that.

"But the overall trend in terms of buyer demand and consumer confidence is clearly on the up, and the outlook in 2010 is more upbeat than it was a year ago."

So don't be disheartened by reports of more lending dips. It does not mean we are returning to the lows of late 2008 and early 2009. Talk to a mortgage broker to reassure you that getting hold of a UK mortgage is not quite the herculean task it once was.

SOURCE: CML, YourMove, 18/02/10

To keep up with the latest news and comments on the mortgage market please visit the Mortgage Broker Blog.

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