Bad news on home loan numbers from CML
In a recent report released earlier this month officials from the Council of Mortgage Lenders claimed that the number of value of homes loans had fallen to the lowest level of record, with the number of home loans dished out in the month of August standing at just 42,000, which reflects a drop of 59% compared to one year earlier just before the global credit crunch gripped the financial markets in the UK and around the world.
In addition, the value of the loans that were granted came to around £6 billion, which reflected a fall of 63% compared to August of 2007. The CML said that whilst the government has taken action to try and boost the mortgage and housing markets this will take time to feed through to the markets, and therefore recovery will be a slow and arduous process. The number and value of home purchase loans for August were the lowest since records began in 2002.
The number of people that were opting for fixed rates fell slightly, with more deciding to opt for tracker rate mortgages according to CML figures.
One official from the group said: “Fixed rates were higher than tracker rates and rose by more from July to August. Expectations of base rate reductions have also increased, so it is unsurprising to see consumers moving in favour of variable rates.”
The government recently announced measures to help get the financial markets moving again, and agreed to pump money into a number of major banks in return for shares and a return to 2007 lending levels.
The CML said: “The package of measures announced yesterday will have a positive effect, but it will take time for it to feed through to the mortgage market.”
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