Mortgage lending drops by 90% from peak

Posted: 05 May 2010 10:22:43 GMT

Mortgage lending has dropped by nearly 90 per cent from its peak in 2007, new figures reveal.

Some £3.7 billion worth of home loans were approved during the first three months of the year, in comparison to the £28.3 billion that was lent when the housing market was at its peak in the first quarter of 2007, the Bank of England statistics show.

William Griffith, spokesperson for PricedOut, says: "This is clearly a very dysfunctional market and mortgage lenders are still very finance constrained."

He advises that first-time buyer should "sit this one out" until the property market levels out and new rules are put in place to encourage sensible mortgage lending.

Figures from GfK Financial recently revealed that first-time buyer numbers have dropped below 350,000 for the first time in two decades.

Additionally, the data showed that while 800,000 people under the age of 30 would like to buy a home this year, less than half of that number will be able to afford to do so.

© Houseladder Ltd