According to the latest Bank of England credit conditions survey, banks would be handing out less mortgage finance as they repay support money received from the government.
According to the Council of Mortgage Lenders, the estimate of gross lending was £11.4 billion in August, which was the lowest in the entire decade.
While the banks try to pay back the government, mortgage financing for the public will take a backseat. According to Ed Stansfield, chief property economist at Capital Economics, many lenders are already trying to restrict mortgage finance.
“The real problem in the mortgage market at the moment isn’t the cost of funds, but the access to funds,” he commented. “People, particularly at the less credit worthy and younger first time buyer end, are struggling in terms of raising a deposit.”
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