Mortgage lending steadily improving
In its latest Credit Conditions Survey, the Bank of England has reported that mortgage lending improved in the three months to early December 2009.
According to the Bank, the upturn was “driven in part by improvements in the economic outlook and in prospects for house prices”.
Encouragingly for first-time buyers, the rise in mortgage availability was greater for borrowers with loan-to-value ratios above 75%.
Bank and building societies also said they expect “a further slight increase” in mortgage lending in the first quarter of 2010.
During the period of the survey, demand for house purchase lending increased but remortgaging demand continued to decline, as borrowers coming to the end of fixed-rate deals opted for lenders’ relatively attractive standard variable rates.
In addition, default rates remained stable, although lenders are expecting a rise in the months ahead.
The report concludes that demand for secured lending for both house purchase and remortgaging is expected to be broadly unchanged in the early months of 2010.