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CML: Mortgage misery 'will continue'

Jaimie Kanwar

Despite positive figures in April, the UK's mortgage market is still on a downward spiral...

New figures from the Council of Mortgage Lenders (CML) reveal that mortgage lending rebounded slightly in April, with 50,700 granted - a rise of 5,000 from the previous month and the highest level since December. But the number was still 36% down compared with the same month in 2007 because of the credit crunch. An average first-time buyer put down a deposit of 13% of a property's value and borrowed 3.3 times their income.

Michael Coogan, CML director general, said that the low levels of lending were set to continue: "Monthly house purchase lending volumes continue to be lower than last year's levels and there will be a further weakening in coming months as recent approvals data has shown. The squeeze on mortgage funding has led many lenders to tighten their lending criteria. While tighter criteria make it more difficult for some borrowers to obtain a mortgage, they also reduce risk in a slower housing market."

Sean Gardner, Director of Price comparison website Moneyexpert.com, added: “In September 2006, only 22 fixed mortgage deals charged application fees of £750 or more. But now that figure has risen to 323 fixed mortgages, a third of the total fixed mortgage market.

”Anyone looking to remortgage or to buy a property for the first time will need to recalculate their options if they haven't factored in fees. The days of fee-free mortgages are over and frankly getting anything under £1,000 is something of a coup."