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UK mortgage market 'will take time to recover'

By Jonathan Dawes, Fri 19 Feb 2010 - Published in Mortgages

Mortgage lending in the UK will recover eventually, but is likely to stay in decline for the coming months, according to an expert.

Timothy Lambert, head of consulting at independent property investment advisor Ducalian, said the UK's economy is still weak after the recession and claimed it will take time for the mortgage market to experience real recovery.

"While the economy is showing growth, it is very fragile still and will take time for confidence to return to lenders, despite pressure being put on them by the government," he commented.

Mr Lambert also said the current weakness of mortgage lending is caused by a tightening on lending criteria, which means that only people with a good credit rating can obtain a home loan.

In addition, first-time buyers are being kept out of the market by prohibitive deposits, some of which are as high as 25 per cent.

The Council of Mortgage Lenders recently revealed that gross mortgage lending fell to around £9.1 billion in January, declining by 32 per cent from the previous month.