Mortgage market needs ‘sustained increase in house building’
David Cameron has announced plans to build 200,000 homes for first-time buyers but Bank of England figures show mortgage approvals have fallen in the last month.
Brian Murphy, head of lending at broker firm Mortgage Advice Bureau, said despite a number of lenders offering record low rates the market had slowed considerably.
Government needed to do more to address this, he warned.
“The government’s new first time buyer incentive is likely to keep home-buying high on many people’s agenda for this year,” he said.
Murphy said while progress was being made, first-time buyers still faced a market with a lack of suitable houses.
“Across the market, low mortgage pricing and a calmer rate of house price growth makes an attractive combination for many people eying up a first step onto the housing ladder,” he said.
“Even so, a sustained increase in house building is a vital part of the jigsaw that is still missing, and government needs to involve lenders and brokers as well as house builders in its efforts to tackle this challenge.”