House price fears over mortgage slump
Published: 01 September, 2010
LONDON: Mortgage lending fell to a four-month low in July, according to the Bank of England, fuelling fears that tight credit conditions may hamper future growth.
Net mortgage lending fell to £86m in July from £518m in June.
Despite a small rise in the number of mortgages approved and an unexpected rise in consumer confidence, economists say it is not enough to stop continued housing market weakness, with knock-on effects for consumer spending.
The National Housing Federation has warned that house owners who bought at the peak of the market face four more years of negative equity.
The Royal Institution of Chartered Surveyors has said that house prices are starting to fall, while figures from the Land Registry suggest that prices are levelling.
The accountancy firm PricewaterhouseCoopers expects prices to be flat for the second half of 2010, and warned that they might not reach the levels seen at the peak of the market for another decade.