"We are seeing little change in the borrowing environment for households or businesses at the start of 2011. The high street banks have seen more remortgaging activity of late as people look to fix costs. The banks’ mortgage lending growth continues to exceed the rest of the market.
"In both unsecured borrowing and company finance, the emphasis is on repayment rather than new borrowing."
Richard Sexton, sales director of e.surv chartered surveyors, said:
“Both lenders and buyers are operating with caution. Fears over the economy have made buyers cautious and exacerbated the underlying weakness in the housing market. Those who do have an appetite to borrow are held back by restrictive LTV’s as lenders consolidate balance sheets. Wealthy investors are filling the vacuum by gobbling up cheap bricks and mortar using cash, then renting out to first time buyers who cannot secure a mortgage.
“This is a two-tier market. Wealthier borrowers have heftier deposits to side-step restrictive lending criteria; so approvals are holding up well on expensive properties and are cushioning the overall figures. The spectre of interest rate rises will frighten the remortgage market back into activity after a Christmas lull, and this will be reflected in February’s figures and beyond. The recent addition of several higher LTV products by some lenders offers some hope of improving conditions, but appetite for this higher LTV business may prove short lived’
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