Mortgage lending down in July

Mortgage lending in the UK is down a staggering 18.5% when you compare July 2010 against July 2009. The number of mortgages confirmed in July fell to 33,698 against 41,000 in July 2009 which is a very worrying fall. So what is going on with the UK housing market?

There is no doubt that the continuous feed of negative comments regarding the UK property market and the UK economy as a whole are starting to have a major impact upon the confidence of investors and house buyers in the UK. Against this backdrop of potential further economic difficulties in the short to medium term, more people are now looking to dispose of their properties and willing to take a lower price. This has placed buyers at the top of the tree with the vast majority now happy to sit on the sidelines as demand continues to wane and supply continues to increase.

This could be something of a double-edged sword because as sentiment continues to struggle in the UK property market so the risk of further economic problems grows which will place more pressure on household incomes. The more pressure on household incomes, the more risk to mortgage providers and the more potential for rates to increase and charges to rise. While we are not yet in the abyss there is no doubt that in some ways we are looking over the edge!