The CML, Council of Mortgage Lenders has just reported disappointing news on the levels of UK lending. New research indicates that lending in September has been 15% lower than September last year and is 10% lower than last month, estimating total borrowing was only £11.6 billion last month.
There seem further indications that demand for house purchases, hence mortgage home loans, have been softening over recent months and it remains unclear how the Olympic effect has distorted figures. There is growing concern that house purchase activity has failed to significantly increase and this coupled with a lull in re-mortgage activity has depressed the market.
In contrast the costs of renting continue to rise and new figures produced by LSL Property Services indicate further inflationary pressure on rents by a further 1.1% in September, a new record high. This is 1.1% higher than August compared to September 2011 is up and 3.2% when comparing the month on month difference.
There is clearly a peak time of tenant demand and rents have risen across 7 different regions across England and Wales. There is evidence that the greatest inflationary pressure is occurring in both London and the South which are driving national increases. As rents increase it proves even harder for first time buyers to set money aside to save for much needed deposits this not only stifles the property market as people cannot get on the property ladder, but also lengthens time spent for first time buyers in the rental sector, increasing competition in the p rental sector.
