Noel Meredith, Head of Development Finance at United Trust Bank comments on the slump in mortgage lending and the latest Nationwide house price index.
Noel Meredith of United Trust Bank said:
“The slump in mortgage lending for June reported by the Bank of England and the weak figures for house prices reported by the Nationwide reflect the need for a demand stimulus. Supply side initiatives for the house building sector are not enough. For the property market to recover younger people need access to mortgages requiring realistic deposits which will allow them to get on to the bottom rung of the home ownership ladder. This will not happen until there are affordable mortgages available requiring 10% – 15% deposits instead of the current 25%+.
“With mortgage rates at low levels property ownership is often cheaper than renting. Getting these people out of the rental sector would help the property market and could reduce their household costs leaving them with additional surplus income and greater potential for stimulating the wider economy.”