Over recent weeks data has been released that indicates mixed news in the mortgage lending markets. There has been much speculation recently about signs of recovery in the property and mortgage markets, and indeed some of the figures relating to mortgage lending levels have pointed towards recovery.

However, as a recent report has indicated it is not all good news and at present the future for the mortgage sector is still very challenging for both lenders and borrowers.

Figures showed that in August of this year mortgage lending increased by £1 billion, and major banks approved over 80 percent more mortgages than they did in the same month of the previous year, indicating that there was some improvement being seen in the market. A number of banks over recent weeks have declared that they are putting more money aside for lending, which could improve consumers’ chances of getting finance.

However, according to some industry officials some lenders, such as smaller banks and building societies, are struggling to put aside more money to lend in the form of mortgages, mainly because they are failing to attract custom from savers due to poor savings interest rates, which means that they have inadequate finances to back up their mortgage lending activities.

This means that lending is still restricted for many, and one mortgage website official said: “Demand is strong, but there are plenty of people who remain frozen out by the banks. We’ve seen record numbers of visitors to our site over the last couple of months, yet we know that tight lending restrictions will prevent many responsible borrowers from gaining finance. Before we see any change of pace in recovery, lenders must become more reasonable in their lending criteria.”

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