lettings appletons on 14 Nov 2007 05:07 pm
Housing market continues its slump
The mortgage lending fell again in September in the UK as interest the rate rises slowed the housing market and house prices continued to fall.
According to a recent survey, a total of £30.6 billion was advanced during September. - This is the lowest monthly lending figure since April of this year. The amount lent to first-time-buyers fell sharply to £12.7 billion, down from £16.2 billion in August. They are now spending an average of 20.4% of their income on mortgage interest payments, figures showed.
The increase is part of a trend which began in early summer and reflected interest rate rises in May and July, the Council of Mortgage Lenders said. But the credit crunch, which has led lenders to tighten their belts, has only just started to affect mortgage approval numbers, suggesting interest rates could be increased again in the coming months.
Figures also showed a fall in house prices for the third month in a row. Analysts expect these factors to combine to further cool the property market.
We believe this data suggests that higher interest rates are now beginning to slow down the housing market. However, due to the recent turmoil in the financial markets the mortgage costs are certainly going to increase.
