Bank of England Survey Reveals UK Lender Apprehension to Lend in the Near Future
The Bank of England has stepped up and made a frank announcement regarding the UK housing market. The Central Bank believes the coming months will offer even more roadblocks to those seeking a home mortgage. It performed its quarterly survey of lenders in an attempt to get a feel for how difficult obtaining mortgage lending will be. Lenders overall viewed the coming months as worrisome due to the poor economy and the continued decline of home prices.
The bank commented on the near future and trying to obtain mortgage lending, saying: "Lenders expected a tightening of credit scoring criteria for granting new secured loans to households.
"Factors such as the cost and availability of funds, the economic outlook and expectations for house prices were all expected to pull down on credit availability.
"Lenders expected the proportion of total loan applications being approved to fall over the coming quarter with some lenders commenting that they had revised down expectations for households' disposable incomes and hence the affordability of taking out new secured loans.”
Most lenders noted that anyone seeking a mortgage loan in the near months will be facing the challenge of providing a large deposit, which has been a constant since the end of 2007. This requirement is stemming from an inability for lenders to take as much risk as well as having a limited amount of funds to offer. Lending to the most lendable has become a staple of monthly practice for those involved in mortgage lending.