Mortgage lending ‘will be negative next year’

Mortgage lending will be negative next year for the first time on record and 75,000 people will have their homes repossessed, the Council of Mortgage Lenders predicted today.

The group expects the number of people who lose their homes to soar by 67% from 45,000 this year, and it predicts 500,000 people will fall at least three months behind with mortgage repayments as the economic downturn intensifies. The mortgage drought will also contribute to a further drop in the number of homes changing hands, with only 700,000 transactions taking place during the year, down from 900,000 this year and 1.63 million in 2007.

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Mortgage lending falls 70% in one month

Statistics released by the Bank of England yesterday have revealed that mortgage lending fell by 70 per cent between September and October this year.

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Mortgage Lending up

New figures from the Council of Mortgage Lenders (CML) show that overall mortgage lending rose by 7% in October.

The rise brought the overall mortgage lending figure to £18.7 billion – although this was still 44% lower than in October 2007.

The news may raise hope amongst would-be homebuyers that the mortgage market is set for recovery – although the CML indicated this would not happen anytime soon. “Any recovery in lending is also being held back by the continuing shortage of mortgage funding,” commented CML director general Michael Coogan.

A mortgage expert for Think Money said: “Any rise in mortgage lending is encouraging – and 7% is by no means a small rise – but there is still some way to go before banks start offering enough mortgages for the market to show real signs of recovery.

“Nonetheless, mortgages are still available in the meantime – it may just take a little extra effort to find the right mortgage deal. Speaking to a professional mortgage adviser can make that process significantly easier.”

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Think Money work with a panel of lenders to offer a range of mortgages. If you are considering taking out a mortgage, contact one of our expert mortgage advisers today. Looking for a remortgage?

October mortgage lending up 7% in October

Mortgage lending in October 2008 was 7% higher than “an admitedly weak” £17.5 billion lent in September, according to a CML report.

“While lending in October ticked up from a low figure in the preceding month, the outlook is one of continuing weakness for housing and mortgage markets in the coming months, despite the Bank rate cuts in October and November.