Mortgage Availability in 2012.

by Mark Johnston

Mortgage Availability in 2012.

A lack of consumer confidence has ment that mortgage lending has been subdued for some time and tough wholesale funding conditions hav also dragged credit availability down over the past year, but lenders have recently seen some improvement.

According to the bank of England, the availability of mortgages has significantly increased over the past quarter and expectations are high for the next 3 months based on the funding for lending scheme.

Danny Waters, chief executive officer of Enterprise Finance, said “there is no doubt that the supply of mortgages has increased in recent months as a result of the funding for lending scheme”.

The latest Bank of England survey suggested the scheme had already started to free up the mortgage market.

The Council of Mortgage Lenders (CML) said that “there are encouraging signs that the cumulative effects of a range of initiatives are having a positive effect currently on lender confidence and activity”

David Brown, commercial director of LSL Property Services, added: “While lending levels are still far from healthy, it’s encouraging that lenders seem to have the appetite to improve mortgage availability in the next quarter, with the Funding For Lending scheme likely to be at the heart of any progress”.

The credit conditions survey measure of mortgage availability increased from -4.1 to 21.9 between quarters 2 and 3 with a predicted score of 36.1 forecast for the final quarter of 2012.

The Mortgage Advice Bureau (MAB), the UK’s leading independent mortgage broker’s, latest national mortgage index indicates that mortgage activity bounced back in September as average rates continued to slide.

The national mortgage index also showed that the total number of applicants increased by 1.9 per cent in September. It appears that this increase was largely due to a rise in re-mortgage activity of almost 12 per cent against each of the previous 2 months and means activity is currently 1.1 per cent higher than at the same time last year.

Brian Murphy, head of lending at Mortgage Advice Bureau, stated “deposits are still higher than they were this time last year and so are the rates on short term fixed deals, but application numbers are also greater than they were 12 months ago which suggests that demand is strengthening”.  

The Bank of England said overall availability of secured credit to households increased significantly in the quarter to September.

Figures found the increase in the availability of mortgages hit a five-year high in the third quarter of the year.

Vicky Redwood, chief UK economist for Capital Economics, said: “Overall, the outlook for bank lending is better than it was a few months ago,

Peter Williams, executive director of Intermediary Mortgage Lenders Association (IMLA), said: “The outlook for the rest of the year looks positive, and over the next three months we are expecting to see a rise in the number of competitive mortgage products being launched by lenders.

In conclusion, the fragile state of the mortgage market has depressed the housing market for some years, but with some lenders now in a more upbeat mood, the situation should improve.


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