4 Jan

Lack of supply 'is restricting mortgage lending'

Lack of supply 'is restricting mortgage lending'

A lack of supply in the housing market is restricting the levels of finance available to homeowners and people intending to purchase property, an industry expert has claimed.

The Building Societies Association (BSA) reported that gross lending by building societies fell slightly in November compared with October.

Gross mortgage lending totalled £1.6 billion in November last year, down from the £1.7 billion reported in the previous month.

Adrian Coles, BSA director-general, explained that although funding conditions are improving for lenders, the lack of properties coming to market is acting as a stumbling block.

"Lending activity is likely to remain relatively depressed in 2010 until funding and supply conditions improve," Mr Coles stated.

In October last year, the Financial Services Authority (FSA) published a raft of reforms for the mortgage sector.

Under its latest proposals, the FSA will impose affordability tests across all mortgage products, whereby it will be the responsibility of the lender to ensure that their customers can meet the repayments.ADNFCR-1222-ID-19538672-ADNFCR

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