BoE Reveals Demand For Mortgage Loans On The Wane

Fri, 04 Jan 2008

Demand for mortgage loans in Britain was lower in the fourth quarter of 2007 than most expert assessments had predicted, the Bank of England has revealed.

The Credit Conditions Survey for Q4 2007 by the BoE, which polled UK lenders between November 19 and December 12 2007, found that the amount of money being made available to borrow by UK households will become increasingly restricted during the next three months.

Meanwhile demand for both buy to let and sub-prime mortgages increased more than expected during the same period. In addition, the Council of Mortgage Lenders (CML), having previously estimating a slower housing market for 2008, has warned that there could be a "potentially significant reduction in consumer demand for lending ".

Bob Pannell, head of research at the CML, commented: "This survey corroborates other evidence of worsening market sentiment. This may increase the chances of interest rate cuts sooner rather than later if inflation remains subdued."

"Borrowers should make a new year resolution to review their finances and plan ahead if they are coming off fixed rate deals later this year," he added.

The CML last month reported that there had been an 8 per cent decline in gross mortgage lending in the UK during November 2007.
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