Mortgages Uncovered

Figures published yesterday revealed that lending for mortgages took a dive to 70% down in October. The BofE’s recent report on the housing and mortgage market showed that net lending on properties (without showing redemptions / repayments) hand reached £459 million during the month of October which is the 2nd lowest figure recorded by Bof E since 1993 when they first started to collate data of this nature.

In October 32K new mortgages were recorded which was down from 33K that took place in September. To put this into perspective, an average at the end of 2007 per month was 72,000 new mortgages a month. 460K mortgages were approved over the last 12 months to date. Over the same period last year this was 1,098,000.

Chief economist, Simon Rubinsohn, from the Royal Institution of Chartered Surveyors, claims:

“Interest rate cuts and falls in interbank lending have not yet encouraged activity to rise in the UK mortgage market. First-time buyers and homeowners alike are still struggling to buy a property as banks are still requesting sizeable deposits, further stagnating the property market.”

BofE figures additionally showed that there was an increase in more unsecured borrowing and lending via overdrafts, credit cards and loans rise by a staggering £844 million in October which is up from September.

Royal Bank of Scotland has pledged to give its struggling mortgage customers six months before it starts to repossess homes, however, rival banks have reacted with skepticism. Lloyds TSB claims that it is slightly curious as to why RBS felt this was a newsworthy plan because Lloyds TSB already rarely seizes any property before 6 months and normally will wait much longer before it will take action.