Mortgage lending in the UK fell seven percent in September compared to the same month in 2011, registering the third worst record for September since 1993, according to the latest Mortgage Monitor Report from e.surv Chartered Surveyors.
Despite improved credit availability thanks to the Bank of England’s Funding for Lending Scheme (FLS), the volume of mortgages granted has not increased by much. In reality, requirements for mortgages with high loan-to-value (LTV) ratios have become stricter, choking off first-time buyers.
Loans for home purchases fell to 47,603 in September, down seven percent from the same month in 2011. The steepest drop was seen among high LTV borrowers, especially first-timers.
At the same time, the average LTV ratio on a home loan declined to 59 percent, marking the lowest LTV ratio since January 2011 and reflects a significant drop in loans to borrowers with small deposits.
“September isn’t just a one off. The mortgage market has been struggling since early June, and is considerably weaker than it was this time last year. The period between August 2011 and May this year marked a real upturn in lending. But that fillip planted false hope,” said Richard Sexton, Business Development Director at e.surv.
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