Mortgage Decline

A further decline in demand for mortgages is expected, in the coming months, as the housing and mortgage market continues to malinger.

Major lenders are speculating that house prices will fall in the first quarter of 2011 as buyers and sellers delay the decision to move.

This has been reported in the Bank of England's Credit Conditions Survey and lenders anticipate that this will also have a knock on effect for remortgages.

However, the lending picture remained relatively unchanged throughout late 2010 but with falling prices the availability of mortgages could pick up.

This will only be reflected if demand for loans increases as a result of house the value drops and data showed that demand for loans fell at its steepest rate , since 2008, in the final quarter of 2010.

Lenders have speculated that prices will continue to fall and that loans will remain restricted.

The recent house price decreases have led to a marginal drop in availability of mortgages for those seeking a loan with a higher than 25% loan to value ratio (LTV).

The report also showed that fewer borrowers on unsecured credit (e.g. credit cards) had defaulted for five consecutive quarters.