Home loans take a dive

Saturday, 29 Mar 2008

Fewer people are buying a home and those who are still interested are finding it harder to get a mortgage.

September’s gross mortgage lending of £30.6bn was down on August’s figures (£34bn), however remortgaging for September was higher than in August as well as being up on last year’s figures.

This resulted in the number of mortgages given to homebuyers by the banks last month dropping by a third. They helped just 43,870 borrowers buy a home compared with more than 65,000 in February last year.

The British Bankers Association blamed a drop in demand and the fact that more would-be buyers were turned down for loans.

Henry Prior of property firm Primemove said that homes are now hard to sell because buyers can't get the necessary mortgage.

However, lending to homeowners remortgaging went up slightly last month.More than a million homebuyers need to remortgage this year as cheap deals fixed two or more years ago expire.

They are finding it painful as interest rates are still increasing despite last month's cut in bank rate.Nationwide pulled its mortgage deals last night and, like many other lenders, will be replacing them with dearer ones.

Source:
http://www.mirror.co.uk/