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Smallest number of new mortgages for 35 years
Jonathan Prynn12 Feb 2009
The number of mortgages on new homes has collapsed to the lowest level since 1974 in a market "barely recognisable" from the boom years.
Home loans for first-time buyers and people moving house halved from 1.02 million to 516,000 in 2008, according to the Council of Mortgage Lenders.
In December there were 32,000 home loans for new purchases, down five per cent since November and the lowest level on record, the CML said.
First-time buyers have been particularly hit by the tightening of loan conditions.
In December there were 21,100 mortgages to first-time buyers worth £1.4 billion, again the lowest recorded. The average deposit was 22 per cent, the highest in 34 years.
The CML figures also show a dramatic shift in the type of loan. Tracker mortgages, which follow the base rate, accounted for 29 per cent of new loans, up from 16 per cent in 2007.
Fixed deals, which set the rate for two, three or five years, made up 58 per cent of deals, down from 73 per cent.
Michael Coogan, the council's director general said: "The shortage of mortgage funding and reduction in the number of active lenders has reshaped the mortgage landscape in a year."
Reader views (1)
I got a mortgage in 1974. The Leeds Permanent BS allowed me 2 x annual salary, I was in the RN at the time and my wife had to beg to get the chap in the BS to give us a mortgage. She was also in full time employment as a Nursing Officer at the time and we were allowed one quarter of her salary towards the amount !! This for a mortgage of £9500, if only the BS's had stuck to that level of lending we might be in a better situation now.
- Nick Holland, glasgow, 13/02/2009 10:48
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