The Bank of England has released a report revealing that the demand for mortgage loans in Britain has dropped significantly in the first quarter of this year.
The Bankís survey on ëCredit Conditionsí accumulated data from lenders which revealed this was the third consecutive quarter in which demand had fallen for mortgages.
The rate of mortgage lending for properties of high value was most apparent, witnessing the most radical drop since the third quarter in 2008. They anticipate the rate will recover in the second quarter of this year.
A number of experts in the field have attributed the recent plummet in demand to alterations in regulatory policy. They also argue it is due to fears over the affordability of property and the ambiguity over the housing market due to the general election among other things.
The chief executive at Dragonfly Property Finance, Mr Jonathan Samuels, commented: ìFor demand to have fallen particularly sharply at the upper end of the market underlines the sensitivity of this demographic to political uncertainty.î
He went on to say: ìMany prime and super-prime buyers are sitting on their hands and want to see what the next government looks like before they commit to a purchase. That this is the most uncertain election in decades has certainly triggered more caution at this level of the market than normal.î
However, the fact that many lenders also anticipate a future recovery may be down to the fact that the general election will be decided in a number of weeks.
Alongside the drop in demand, the survey also revealed that mortgage lenders were showing more eagerness to lend to customers who could only put down a deposit that was less than 10% of the property they were looking to purchase. A significant portion of these customers would be first-time buyers.
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