Mortgage News

Mortgage loans harder to get

15 August 2008

The number of mortgage loans agreed in the UK has dropped by around a half in the past year, it has been reported.

Figures from the Council of Mortgage Lenders (CML) show 98,000 home loans were agreed last June compared with 47,000 this June.

Bob Pannell, the CML`s head of research, said: "Mortgage lending activity remains relatively weak and will decline further in the coming months as a result of funding constraints and lower consumer demand."

According to Only Finance, the credit crunch means potential buyers need larger deposits to be accepted by lenders. First-time buyers appear to be getting priced out of the market, with a 46 per cent drop in first mortgage loans in 12 months, the Business Scotsman said.

Those trying to get onto the property ladder are borrowing over three times their income to pay for their home, potentially running up debt problems such as arrears.

House prices fell 1.7 per cent last month, according to the Halifax Price Index.