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Mortgage lending under serious pressure

The month of November has seen mortgage lending fall to record lows with a drop of over two thirds from the highs of 2007 with many experts forecasting further falls. Despite a window of opportunity only a few weeks ago in which the property market appeared to be consolidating this small light at the end of the tunnel has gone out. The UK property market now appears to be heading south faster than ever before breaking records on the way down and leaving many homeowners in negative equity and financial ruin.

While the banks have received much criticism in the press over their position on mortgage rates the fact that the property market is showing little sign of life in its own right does in some eyes rubber stamp their policy. Many had wondered why the banks have been so tough in the face of constant criticism from many different parties but perhaps today's news and the ongoing downward trend towards recession answers some of those questions.

With interest rates in the UK hovering at 2% a substantial reduction to near 0% seems inevitable in the short term but whether this will be enough to turn around the UK economy remains to be seen.

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