Mortgage lending falls in June

According to figures that have been released by the Bank of England the number of mortgage approvals in the UK for the month of June saw a fall, with weakening confidence in the housing market coupled with tightening lending conditions being amongst the factors that have been blamed for the drop in mortgage lending levels.

The figures showed that the number of mortgage loans that were granted in June came in at 48,000, which is 3,000 lower than the figure for May, which was 51,000 approved and granted mortgage loans. The Nationwide Building Society has said that consumer confidence fell to its lowest level since the start of the year and the property website Right Move has said that sellers have now started cutting their asking prices for the first time this year.

It is thought that consumer confidence has fallen partly as a result of the huge spending cuts announced in the emergency budget in June, which have been put in place by the coalition government in order to tackle the huge public deficit. The Bank of England has also said that house prices and sales are likely to remain flat for the remainder of this year.

In the meantime there has been an increase in the number of properties that are being put on the market for sale, and this is also affecting house prices due to supply being high and demand being low because of low confidence levels and lack of mortgage availability.

In a recent statement the Bank of England stated: “Demand continued to be constrained by the restrictions on mortgage finance. Looking forward, the major U.K. lenders expect demand for secured lending to be flat over the rest of the year, partly reflecting weak confidence among potential homebuyers.”