Mortgage Market

Mortgage availability remains scarce, with the number of mortgage types/names/structures is down over 80% since 2007. Lending is down from £345billion to around £145bil. this year.

Figures out from Bank of England report an increase in net mortgage lending £1.9billion in Dec 08 from £0.9billion in November.

Some media outlets reported this as potentially a signal in the market that the bottom has somehow been found. Unfortunately this is NOT the case and here´s why......

There are many saying about ´one swallow not making a summer´ etc. Well, one monthly report does not make a recovery! Looking at a wider picture, compared to a year or so ago, the figure of £1.9billion is still about 80% down on a £9billion monthly average figure .

A more even number can be found in the quarterly numbers; Q4 Net Mortgage lending was £3.6billion, the lowest total since 1995 apparently, compared with approximately £27billion for a simialr period in 2007, when total net lending hit £108billion.

The number of house sale transactions is down from 1,685,000 to 700,000 since 2006.

So, whilst the percentage increase might look good, the bigger picture puts it in to perspective.

In 2008, a number of Banks reported an increase in mortgage lending, notably Abbey Santander and HSBC, who appear to be cherry-picking their way through the debris of the Fixed Rate fallout. However, many others have virtually withdrawn from the residential mortgage market. Which begs the question, how much free market choice will there be in the mortgage market in a few years?

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