Loan-to-value ratios and overall lending volume in the UK for August slumped back to 2010 levels, according to a Mortgage Monitor Survey by e.surv.
Last month, mortgages granted fell by eight percent to 48,913 from the same period in 2011. In particular, loan approvals for mortgages with deposits of less than 15 percent dropped by 10 percent to 4,950 from 5,463 last year.
“Much of the progress the mortgage market has made since summer 2011 has been unraveled by the double-dip recession. Lending volumes, particularly to first-time buyers, are slipping back towards the dismal levels we last saw in 2010 and early 2011,” said Richard Sexton, Business Development Director at e.surv.
“This is largely thanks to a fall in the number of high-loan-to-value mortgages banks are willing to grant. Credit conditions for banks have become painfully tight, and they have responded by toughening criteria on mortgages aimed at borrowers with small deposits.”
Andrew Montlake, Director at London-based mortgage adviser Coreco, added: “Lenders have to want to lend. There is a demand but I feel that a lot of the lower rates being offered are more of a PR exercise. The reality is, it is very difficult to get a mortgage at the moment.”
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