Record fall in Mortgage Lending

According to the figures released by the Bank of England, the net mortgage lending in UK stood at £8.15 billion during 2010 which was down from £11.33 billion in 2009.This was the lowest level since 1987 as per the records available with the Bank.

The number of mortgages approved for house purchases dropped by 10 percent during December last year.

The lenders had less money to advance due to credit crunch and the strict lending conditions kept many borrowers away from approaching lenders. The Council of Mortgage Lenders has warned that this year’s lending levels may fall up to £6 billion.

The Nationwide figures on house prices indicated a fall by 0.1pc during December. It warned that the outlook of the property market was highly uncertain.

Mr. Howard Archer of IHS Global Insight said the data released by the Bank of England pointed a housing market stuck even if admitting the fact that severe weather in December made an impact on housing market. He expected a 10 percent fall in house prices by the end of 2011.

Mr. Paul Diggle of Capital Economics said that mortgage lending was unlikely to pick up significantly this year due to supply and demand constraints.

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