Mortgage lending in the UK dropped to its lowest level in two years, with 42,500 mortgage arrangements recorded at the end of last year.
The total amount of lending also plummeted to £8 billion in 2010, compared to £11 billion recorded in 2009. Many experts noted that the mortgage level was similar in the 1980s, when interest rates stood at nearly 10 percent.
Many said that tough lending criteria will likely be high for the foreseeable future, as most banks remain cautious. However, despite the low lending figures, the overall number of mortgage products available has increased or nearly doubled in 2010.
“Although lenders’ windows may be full of best buy deals, it doesn’t mean they want to lend. The increase in the number of mortgage deals for those with smaller deposits is encouraging, but only a limited number of such mortgages are likely to be approved,” said Michelle Slade, a spokesperson for a leading financial website.
Chris Eagle, Marketing Director of another leading financial website, said that “it still comes down to the size of your deposit but more importantly, how much you can afford to repay. So if you are struggling to get a mortgage, compare all the deals available online and see what you can get for the size of your deposit and individual circumstances.”