(1888PressRelease)
September 15, 2007 - The latest statistics from the Building Societies Association (BSA) show that mortgage lending was down in June, as consumer confidence in the housing market collapses.
It comes as interest rates sit at a six-year high, with most analysts predicting further increases in the coming months.
BSA's figures show that annual mortgage approvals were down from £6,046 million in June 2006 to £4,693 million in 2007.
The decline is being blamed on interest rate rises, while the imminent introduction of Home information packs is also thought to be a factor.
"The slow start to the summer has continued. Although 2007 started strongly, it seems the impact of successive interest rate rises is now being felt and is affecting affordability," commented Brian Morris, head of savings policy at the BSA.
"With many commentators expecting another rate rise soon, lending may well cool further over the remainder of the year and into 2008."
Julian King of National Homebuyers says: "This comes as the National Association of Estate Agents reports that consumer confidence is low, there's a six per cent reduction in people looking to but a house in June.
"However, the issue here is first-time buyers' ability to take out a mortgage. I have said before that traditionally, first time buyers account for 45-50 per cent of all property transactions.
"In 2005 this dipped to 30 per cent according to the Council for Mortgage Lenders. When this drops even further, the market will have only half of its potential buyers available. That's a disaster."
National Homebuyers is the leading fast property purchase firm, guaranteeing a quick sale to UK homeowners. The company also offers a Sell and Rent Back solution, allowing the homeowner to release equity in their home.
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