Banks 'need to start lending'
Lending for mortgages by UK high street banks has fallen, it has been revealed - which could see more people continuing to rent until buying becomes more affordable.
According to the British Bankers Association, mortgage lending declined to 35,000 in January of this year, in comparison to the 46,000 recorded in December.
It is believed the extreme cold weather and snow was partly to blame for this reduced activity within the housing market.
Commenting on the news, Catherine Hearnden, director of MyMortgageDirect, said: "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 added that people who have not been able to raise a big enough deposit were beginning to realise that they would have to pay more on their mortgage as a result.
Ms Hearnden said in order to reverse this trend there is a need for people to go back to the idea that they must save seriously in order to get a deposit for a home.
Britons with ambitions to buy may find that flats to rent in Eltham or another part of London offer them affordable accommodation while they put money aside.
Written by Charles Mackay
Published 1st March, 2010
© 2010 Estates IT Limited
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In order to alleviate the fall in mortgages, banks need to start lending again, it has been claimed - although it could be said until they do, more people will be looking for property to rent in London.