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Funding gap causes concern in UK mortgage market

It was revealed that gross mortgage lending between March and April fell by a significant 12% amid signs that the funding gap in the UK mortgage market is worsening. Since the credit crunch we have seen a massive increase in the cost of credit in the wholesale money markets although a variety of former government schemes have taken some of the pressure away from funding issues. However, a number of these schemes have now ended and concern is growing as to how the current funding deficit will be breached.

While it is almost certain that the incoming government will address these funding issues in the short-term we will need to see where we stand regarding the public sector budget deficit before any other schemes or initiatives can be announced. There are real fears that a credit crunch type squeeze could be occurring in the UK mortgage market which may lead to a further slowdown in the property sector.

When you also take into account the fact that the UK economy is not exactly buoyant at the moment it is difficult to see where any fresh initiative will come from to increase the number of UK property buyers.

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