Increased lending 'would support UK housing'

Mon 1 Mar 2010 - Published in Mortgages

Banks have to increase their lending to alleviate the problems in the UK's mortgage market, according to an expert.

The British Bankers' Association revealed that 35,000 new mortgages were issued during January, falling from 46,000 in the previous month.

Catherine Hearnden, director of MyMortgageDirect, said the end of the stamp duty holiday and bad weather contributed to the drop but suggested banks could more to support the markets.

"There is pressure on the banks to lend and we think that they have to do it. There are increased loan-to-values coming out, people are beginning to realise that if they want 90 per cent, they must pay for it," she commented.

Ms Hearnden also advised first-time buyers to recognise the importance of saving, pointing out that many people took out larger mortgages than they needed to pay for extras such as furniture.

The expert added that reforming the stamp duty system to make people pay according to their income rather than the value of their home would be fairer and better support the housing market.

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