CML - Mortgage market set for continued period of caution

CML - Mortgage market set for continued period of caution

An expert has said that people will remain cautious in the home credit market for the remainder of 2010.

People seeking a home credit deal are likely to remain guarded in their search for a product such as a tracker mortgage in the near future following the measures announced in the comprehensive spending review last week.

That is the view of Bernard Clarke, a spokesman for the Council of Mortgage Lenders (CML), who said that the UK's mortgage market will not enjoy a renaissance in the coming months - an opinion that is backed up by statistics published yesterday (October 25th) by the British Bankers' Association (BBA).

According to the BBA, the number of approvals for home credit packages dipped slightly to 31,104 in September in comparison to 31,781 one month previously.

Moreover, this is also below the average number of approvals awarded over the last six months, while the value of each mortgage deal dropped by 600 on average last month to a total of 142,900.

And Mr Clarke commented that these figures are "broadly in line with our view, which is that we won't see any significant recovery in mortgage lending throughout the rest of this year".

Meanwhile, while the number of new home credit packages being taken out is declining, the BBA's statistics show that competitive remortgaging deals may be more widely available following the global economic downturn, as the total awarded in September exceeded the average number for the previous six-month period.

However, the CML official added that this does not represent a definitive healthy outlook for this area of the home credit sector either.

"I think the best options will remain available only to the lowest risk customers and those with a reasonable amount of equity in their property," he explained.

And this view appears to be reinforced by figures published earlier this month by the CML itself, which stated that remortgaging activity accounted for the lowest proportion of total loans approved for ten years in August.

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