CML chief economist Bob Pannell observes:
"There have been hints of demand softening over recent months, but monthly patterns may have been distorted by the Olympics. House purchase demand failed to lift significantly in the third quarter, despite much better mortgage availability. Remortgage activity continued to languish, in contrast to relatively strong levels a year ago."
Duncan Kreeger, chairman of West One Loans commented, “The mortgage market is clearly in a lot of trouble and today’s figures show the situation is getting worse. Traditional credit is failing and even the government’s flagship Funding for Lending scheme is having little effect.
“Lending is as weak as it’s been for 18 months. Inflexible rules around capital adequacy and income ratios are paralysing the market, and tight credit scoring is freezing borrowers out of the market. This week’s report from Ernst & Young announced that UK housing and mortgages would power a full-scale economic recovery next year. That looks like wishful thinking set against this news. The mainstream mortgage market won’t escape from this hole it’s in any time soon.
“This is exactly why we’re seeing plenty of buy-to-let investors and developers turn to alternative forms of finance in the absence of credit from the high-street. With traditional mortgage lending struggling so badly, alternative forms of finance like bridging are becoming increasingly important to the lending mix.”
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