4
Jan
Lack of supply 'is restricting mortgage lending'
A lack of supply in the housing market is restricting the levels of
finance available to homeowners and people intending to purchase
property, an industry expert has claimed.
The Building Societies Association (BSA) reported that gross
lending by building societies fell slightly in November compared
with October.
Gross mortgage lending totalled £1.6 billion in November last
year, down from the £1.7 billion reported in the previous
month.
Adrian Coles, BSA director-general, explained that although funding
conditions are improving for lenders, the lack of properties coming
to market is acting as a stumbling block.
"Lending activity is likely to remain relatively depressed in 2010
until funding and supply conditions improve," Mr Coles
stated.
In October last year, the Financial Services Authority (FSA)
published a raft of reforms for the mortgage sector.
Under its latest proposals, the FSA will impose affordability tests
across all mortgage products, whereby it will be the responsibility
of the lender to ensure that their customers can meet the
repayments.