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First-time Buyers

Bank of England blames property shortage for slowing lending

paulajohn
Written By:
paulajohn
Posted:
Updated:
26/02/2015

The Bank of England has highlighted a shortage of properties in the UK housing market and the impact of the Mortgage Market Review as the two reasons for a slowdown in mortgage lending growth.

Figures from the Council of Mortgage Lenders today show lending, while still increasing, has begun to plateau in the months following MMR.

The Bank of England’s trends in lending report, which considers the three months to May, showed the number of loan approvals falling back as lenders prepared for the new regulations and buyers struggled to fund suitable properties.

However, gross lending remained strong with the overall mortgage book rising.

“Gross secured lending in the three months to May was broadly similar to the previous period,” the Bank said.

“The average monthly net lending flow by UK-resident mortgage lenders was £1.8bn, slightly higher than the previous three months. The annual rate of growth in the stock of secured lending to individuals rose slightly to 1.3% in May.”

The Bank’s figures also showed the number of claims for possessions issued in the courts fell slightly while there was little change in the number of properties taken into possession against the number of outstanding mortgages.