Mortgage lending conditions in the UK are tightening as a result of uncertainty regarding the wider economic climate, new research has suggested.
According to the latest e.surv Mortgage Monitor, first-time buyer (FTB) numbers in September dropped to their lowliest levels since November last year.
The report pointed to stricter home loan lending practices as the reason for this, which has served to reverse the positive trend of increased loan-to-value lending and greater numbers of first time buyers seen over the summer months.
Concerns over a stagnant economy, coupled with a constricted credit environment, have encouraged lenders to focus more on wealthier borrowers, the study demonstrated.
Richard Sexton, business development director at e.surv – which started operating in 1987 as part of General Accident, before becoming a separate business in 1992 – commented: “These restricted credit conditions will be like a leach sucking the life from the bottom of the market, with the knock-on effects reverberating throughout the market.”
The industry figure added banks are in no position to increase their loan books at present, owing to the intense pressure on capital.
