A warning has been issued by lenders with regards to the expense of mortgages, with officials stating that restraints on mortgage lending are set to continue, and certainly aren’t likely to ease up in the near future.

A number of reports had suggested that there could be a return of high loan to value mortgage loans, but lenders have said that this is not the case, and that the mortgage lending market is still restricted.

The warning came from the Council of Mortgage Lenders, which said that its members’ lending ability was ‘constrained for the foreseeable future.’ 99% of all mortgage lending in the UK is covered by members of the Council of Mortgage Lenders.

The warning comes amidst a variety of reports that have suggested that there may be improvement in the near future, and that consumers may be able to get bigger mortgages and lower deposits from lenders.

An official from the CML said: ‘The underlying problem is that we don’t have access to the range and type of funding we used to have. Government intervention (namely through lending agreements with semi-nationalised banks) has improved the situation but the constraints on lenders are real.’

Officials added that there was no real chance of any rapid change in this situation, despite intervention from the government to try and boost mortgage lending.

However, one group has said that it is vital that lenders start going back to normal risk based lending and assessing applications as before in order to get first time buyers into the market. One official said: ‘Now is the time to resume normal risk-based lending and to move back to the core competency of assessing risk and demonstrating underwriting skills.’

Leave a comment