Mortgage recovery “some way away”

08 July 2008

Mortgage situation will “get worse before it gets better”

Figures from the Council of Mortgage Lenders (CML) have shown that the number of mortgages in May was still low, with 52,700 home loans being approved.

May saw a 4% improvement on the previous month however, it was still 44% lower than the number seen in May 2007.

This has provoked the CML to say that any recovery in the mortgage market is still “some way away”.

The figures also showed that the number of borrowers remortgaging fell by 14% between April and May and by 23% over the course of the 12 months between May 2007 and 2008.

Michael Coogan, director general of the CML, said: “Lending levels continue to be lower than last year and any recovery is still some way away.”

The CML warned that the current situation was probably going to “get worse before it gets better”. This in turn means that first-time buyers will have to stump up larger deposits and will need to have good credit ratings before they can even think about entering the housing market.

The group also said that the number of mortgages would decrease further still in future months because this is what the recent Bank of England mortgage approvals data indicated.

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