Mortgage market to remain "broadly stable" in 2011
Saturday, 8 January 2011 8:00 AM
Property buyers in the UK should be able to enjoy a "broadly stable" mortgage outlook in 2011, according to the Royal Institution of Chartered Surveyors (RICS).
In response to the Bank of England's latest Credit Conditions Survey, Simon Rubinsohn, RICS' chief economist, said: "The survey suggests little change in the availability of mortgage finance in recent months. This broadly stable picture is expected to persist during the early part of 2011."
He added: "Significantly, the report indicates a continuing preference amongst lenders to steer away from higher-risk loans. While the availability of finance for 'low' loan-to-value mortgages has actually increased, it has contracted where smaller deposits are being put down by borrowers."
Rubinsohn went on to say that this "contrasting picture" clearly demonstrates the challenges facing first-time buyers as they try to get a foothold on the UK property ladder.
"Even without the implementation of the tough recommendations to the Mortgage Market Review from the Financial Services Authority, lenders will continue to be cautious in the provision of finance," he explained.
The expert suggested that, as a result, mortgage approvals in 2011 would not be very different from last year.
"It also points to a further increase in demand to rent property," he added, noting that the last RICS Residential Lettings Survey had indicated that imbalanced supply and demand was already pushing up rental prices.
