Mortgage firms 'still not lending'

13/03/2009

The mortgage market continues to be hammered by the credit crunch, latest Council of Mortgage Lenders (CML) figures have shown.

According to the industry association, just 23,400 home loans were completed in January 2009 - down from 48,600 on the same month the previous year.

First-time buyers numbers dropped by a similar amount, with just 8,900 counted for January, compared to 18,000 in January 2008.

Over recent months, the credit crunch has led to falls in house prices and a slump in both mortgage provision from lenders and buyer demand.

Repossessions numbers have risen due to the lack of cheap loans and more and more homeowners are falling into negative equity - where the value of their mortgage exceeds the value of their home.

Michael Coogan, CML director general, commented: "People want to know why lenders are not lending.

"They are, but government schemes to restore the flow of funds are primarily focused on a few large banks and recent lending commitments by a few lenders cannot fill the gap overnight although we hope to see more funds flowing into mortgage activity later in the year."

Separate CML figures recently revealed that home repossessions in the UK hit 40,000 last year.

In 2007, this total stood at 27,000.

Tags; Housing Debt and Bills, Young Family Finances,

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