Weak mortgage lending causes the numbers of buyers to fall

"Individuals and businesses continue to save more, pay off debt and borrow less as uncertainty about the economy has entrenched a ‘wait and see’ attitude. However, banks are still able to meet the need for home loans even though demand remains weak. Businesses – SMEs in particular – are using cashflow and deposits to fund expenditure rather than taking on more borrowing.”

Commenting on the figures, Nicholas Leeming, business development director of Zoopla.co.uk, said:

“Weak mortgage lending is causing the numbers of buyers to fall and falling demand from buyers is putting downward pressure on house prices. Downward pressure on prices is making owners reluctant to put their property on the market and lack of property on the market is deterring buyers. It’s a vicious circle, but it can be broken if the lenders want to tackle the problem and the key is to feed from the bottom up. First-time buyers need to be encouraged to take advantage of low prices by offering them finance that is appropriate to their situation. When there is more energy at the bottom of the market the rest of the ladder can feed off it. But until the first-time buyer problem is addressed the property market will continue to bump along going nowhere fast.”

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