Mortgage Recession Continues

Friday 13 March 2009

According to CML records, Mortgage lending in January 2009 fell dramatically. Only 23,400 mortgages were completed, out of which only 8,900 were available for first-time buyers. These figures are 28% lower than in December and 52% lower compared to January 2008. Experts say that market recession causes lenders ration their lending. Recent withdrawal of specialists and foreign lenders widened the gap between mortgage funding and consumer demand. As lenders restrict the loans, first-time buyers have to deposit larger sums of money than ever before. An average down payment for a first-time buyer now constitutes 24% of the property, while an average loan of first-time buyer amounts to approximately £97,000. House movers average loans have also decreased to an average of £117,000 with a down payment of almost 35%. These figures were last seen in 2005. CML report suggests that house movers are usually middle-aged people, who still have equity in their houses, which has not been yet completely destroyed by the financial crises and fall in prices. January reports demonstrated that an average age of a house mover reached 41 years. An average first-time buyer is aged 29 years. As for asking prices around the United Kingdom, estimates show that in a number of cities the prices fell by 20-28%, for instance, in Blackpool, Lewes, and Windsor. The average asking price in the UK has decreased by 11%.