A report by the Bank of England warns of another credit crunch in the months to come. In the latest Credit Conditions Survey by the Bank covering the last 3 months said the money markets funding lenders is tightenting. This will mean that there will be less mortgage loans available to borrowers.
This news is difficult for the housing market to swallow. The market is already suffering from slow rising home prices as well as a drop in approved mortgage loans.
First time buyers are finding it increasingly difficult to obtain lending. The average deposit of first time buyers in April 2010 was approximately 25 per cent of the home’s value.
Simon Rubinsohn, chief economist with the Royal Institution of Chartered Surveyors, said: “The likelihood is that the finance for the property market will continue to be in short supply for some time to come.”