Lending Levels Slump

I was concerned to read a report from Valuers e-serv indicating that house purchase approvals for lending fell for the second successive month. The average deposit size was 40% in October with lower income buyers struggling to meet criteria for high LTV products. Loans with a deposit of 15% or under accounted for less than one tenth of all lending in October compared to almost a quarter in 2007. The positive piece of news was that October 2011 approvals were 6.7% higher than October 2010. We cannot read too much into these figures, however, they do point to a concerning downward trend. My Firm’s figures report continuing increase in listings compared to target and compared to last year however that is against a market that remains relatively stable. I am also noting a steady increase in property investment business and this is reflected in an increase in the number of new buy to let loans. The Council of Mortgage Lenders has reported that the number of new buy to let loans increased by 16% in the third quarter of 2011. I will continue to keep you advised of trends and will report further on the buy to let business in due course.

Lindsay Darroch
Partner and Head of Property

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