Limited mortgage lending ‘hampering housing market recovery’

Posted 09/07/2009

Two major UK housebuilders have warned that improvements in the housing market are being delayed by limited mortgage lending.

According to Barratt Developments, improved customer sentiment has led to more people looking to make a property purchase, as the market is starting to stabilise.

However, it warned that with financial providers still using strict lending criteria, this is not translating into actual sales.

Mark Clare, group chief executive of Barratt, commented: “The market is shut for an awful lot of people.

“It has removed the opportunity to buy their first home.”

Similar concerns were expressed by Redrow, which said conditions in the mortgage sector are proving to be a “major obstacle” to any recovery.

The company stated that resolving this problem would play a significant role in driving a recovery in the economy as a whole.

Meanwhile, Alison Rolls of the Norwich and Peterborough Building Society has said consumers are still being very cautious about buying a new home.

Speaking to the Norwich Evening News, she attributed this partly to people not changing jobs as a result of the recession, and thereby not needing to move as frequently.