Property boom quietens
20 June 2004
The head of mortgages at Bradford & Bingley's MarketPlace has been speaking about the Council of Mortgage Lenders' most recent figures.
They revealed that mortgage lending was £1 billion lower in May than in April.
Lending for house purchase similarly dropped from 51 per cent to 48 per cent in April, which possibly indicates a cooling down of the property market.
Elliot Nathan, mortgage development manager at the MarketPlace says: "While the property market has long been predicted to slow down, people should be wary about taking this to mean a crash is around the corner."
He continued: "The economic environment is very different to the one in the early 1990s, when unemployment and interest rates were high. Today, despite recent interest rate rises, interest rates are still historically low and unemployment levels too are very low."
Yet, he did warn homebuyers of the need to "budget carefully and ensure they don't overstretch themselves financially."
The CML's figures also showed that the number of first time buyers getting a foot up onto the property ladder has increased modestly from 28 per cent in April to 31 per cent.
Mr Nathan said this was "encouraging" and a move "in the right direction."
However, the figure is still lower than its historical norm of 40-45 per cent.
Commenting on variable rates, Mr Nathan said: "The high proportion of lending on variable rates - 68 per cent of all lending - clearly demonstrates that price is still the key driver in the market."
The MarketPlace has produced a booklet entitled 'Helping you buy your first home', which offers first time buyers information on the range of specialist mortgages available.