Mortgage market holding up well

While mortgage affordability has been hit by the global credit crunch, business levels in the market remain relatively healthy, according to a leading industry association.

New figures published by the Council of Mortgage Lenders (CML) today (January 8th) indicated a further drop in the popularity of fixed rate products among homeowners, while gross lending fell by 10.4 per cent between October and November and the number of approvals also fell.

However, the CML director general, Michael Coogan, claimed that the market situation remained reasonably strong, claiming a cut in interest rates would offer a welcome boost for those looking to take out a new mortgage deal.

"At a time of global market uncertainty, business levels in the mortgage market are holding up reasonably well in the UK despite funding constraints," he said.

"There are mixed signals on inflationary pressures here which will make the Monetary Policy Committee's decision finely balanced, but consumer confidence would be further underpinned by another rate cut this week."

Last week the Bank of England's Credit Conditions survey warned that the availability of secured credit such as mortgages had "reduced materially".

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