30 percent fall in mortgages in 2008
According to officials from the Council of Mortgage Lenders, mortgage lending over the course of last year fell by around 30 percent, taking it to its lowest levels since around 2002.
Last year saw total mortgage lending come to around £256.4 billion in value, and this reflected a fall from the £363.7 billion worth of mortgage lending that was seen the previous year in 2007.
Officials have said that part of the reason for the dramatic fall in mortgage lending was the mortgage drought that resulted from the tighter credit conditions that came into place as a result of the global credit crunch. This has made it far more difficult for many consumers to get a mortgage loan, and lenders have been severely cutting back on their lending as well as tightening their credit conditions.
Mortgage lending levels in December of last year were down by nearly 50 percent compared to the same month the previous year. Michael Coogan from the Council of Mortgage Lenders stated: “December is typically a quiet month in the mortgage market, on top of which the market has been constrained by a shortage of funding and reduced demand.”
One industry official said: “With the economic situation deteriorating by the day, the banking system in crisis and consumer confidence at an all time low, it’s hard to believe mortgage activity will pick up any time soon, whatever the government does. Even if banks do start lending more, the question now is will people want to borrow? Faced with such uncertainty, the last thing on many people’s minds will be moving house.”
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