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Home loans fall by a third



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Published Date: 21 August 2008
THE number of mortgages issued by lenders is a third lower than this time last year, new data published today has shown.
The Council of Mortgage Lenders said that there were 18,500 loans for house purchases issued in Scotland between April and June, compared to 28,200 in the same period last year.

First-time buyers accounted for 36 per cent of the mortgages issued, slightly above the same period last year.

Although the mortgage market in Scotland has contracted, it is still faring better than the overall UK market, where there was a 46 per cent year-on-year decline in the second quarter.

As is common in the second quarter, the number of mortgages issued was 18 per cent ahead of the first three months of the year, following significant declines in the fourth quarter of 2007.





The full article contains 146 words and appears in Edinburgh Evening News newspaper.
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  • Last Updated: 21 August 2008 10:33 AM
  • Source: Edinburgh Evening News
  • Location: Edinburgh
 
1

hertscot,

21/08/2008 15:12:08
Hope nobody complains about this, as it must mean the amount of consumer debt has either stagnated or fallen, and that's a good thing....... isn't it?
2

A Friend of Fernando Poo,

21/08/2008 17:42:57
#1: The stats coming in have some oddities. The percentage fall in mortgage numbers is considerably higher than the percentage fall in gross advances. Either prices are still rocketing up, or lower-priced property is being much harder hit than other property.

Whether or not consumer debt has fallen depends on other factors such as the number of mortgages redeemed compared to new mortgages; new car loans; new credit card loans etc.

Amongst Building Socoieties, it looks like gross mortgage redemptions is exceeding gross new mortgages. Not so (yet?) for the banks. There's also a shift from people borrowing against their property through equity withdrawal towards borrowing more on credit cards.

The US saw a similar move 12-18 months ago. Interestingly the derivatives built on credit cards (the same way CDOs were built on mortgages) in the US are now seeing higher defaults. This is causing credit card loans to be reined in and made more exepensive there. The same looks like happening to car loans there too.

Most likely we'll see the same effects here over the next year or so.

What will be more interesting once this starts happening is whether there will be enough of a slowdown in money supply to drive the US and UK into deflation. I think a deflation would be quite fascinating.

 

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