Consumers could face further restrictions on mortgages

After a year of rationing when it comes to mortgages consumers could continue to face severe difficulties when looking for a mortgage over the forthcoming year, with restrictions within the mortgage sector set to get even worse according to officials from the Council of Mortgage lenders.

The CML has stated that whilst 2008 has been a very difficult year in terms of mortgage availability and affordability, with lenders being increasingly stringent over their lending criteria, next year could be even more difficult, and many consumers would be facing increased difficulties in finding a suitable mortgage.

Michael Coogan from the CML said that the mortgage market had become dysfunctional, and despite the efforts already made the government needed to take further action to get the wheels of the mortgage market in motion again. He said: ‘We have, in effect, returned to mortgage rationing.’

Mr Coogan went on to stated: ‘Unless Government takes further targeted action to help market participants, we will see a worsening picture next year compared with this.’ He said that amongst the groups that were suffering most due to these restrictions and higher costs in the mortgage sector were first time buyers with no equity and little in the way of savings.