CML: Mortgage squeeze continuing

According to the latest figures from the Council of Mortgage Lenders (CML), the mortgage drought is continuing after the organisation revealed that the number of loans approved for house purchases in the UK has fallen.

Figures show that 47,000 home loans were approved compared with 98,000 in June 2007, and down from 52,000 in May this year.

CML’s head of research, Bob Pannell, said mortgage lending activity remains relatively weak and is likely to fall further over the next few months due to funding restrictions and a fall in consumer demand.

Mr Pannell added that the chunk of lending continues to be to people with larger deposits and this is wise for borrowers and lenders in the current slowdown.

The Council’s figures also revealed that the average homebuyer put down a deposit of 22% in June with the average age of these new borrowers being 35.

In May this year, the average deposit was 20%, proving that lenders are favouring those borrowers with a higher deposit.

The CML also found that the average first-time buyer borrowed 3.33 times their income, with the average home mover borrowing 2.94 times their income.

Figures from Moneyfacts.co.uk earlier this week revealed that there are now 71% fewer mortgages available compared with this time last year.

There are now 3,748 mortgage deals available compared with 13,027 mortgage products last August, according to Moneyfacts, showing what an impact the credit crunch has had on the housing market.

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