UK lending to fall by 20%

Permalink: UK lending to fall by 20%
by Kay Murchie

Business intelligence company, Datamonitor, believes the UK mortgage market will shrink by a fifth by the end of the year.

Datamonitor is forecasting that mortgage lending will continue to fall, by a total of 19.3% this year and by a further 3% next year.

The organisation claims that the full impact of the credit crunch has not yet passed through to borrowers.

The news comes despite the recent rate cuts from some of the UK’s largest lenders including Abbey, Halifax and Cheltenham & Gloucester.

The bleak outlook follows other gloomy news in the UK housing market after Wolsey Securities forecasted that the number of housing transactions in the UK are set to fall 60% below the worst period of the early 1990s when the UK was last in recession.

Credit rating agency, Standard & Poor, recently forecast that property prices will fall by a further 17% next year, while economic consultancy, Global Insight, believes house prices will decline by a further 20%.