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Mortgage lending 'unlikely to pick up in 2011'
22/11/10
Edited by Tom Bardsley.Mortgage lending is unlikely to experience any significant improvement during 2011, financial institutions have warned.
The BBC said a number of banks and building societies have told the corporation that with activity already subdued, planned changes to industry regulations are set to "cement" the low level of borrowing in place.
Under the proposed changes from the Financial Services Authority, lenders will have to meet tougher guidelines when assessing a prospective buyer's income and ability to repay a loan.
According to some industry figures, around half of the borrowers approved for a residential property loan in recent years would have been turned down if the new rules had been in place.
BBC personal finance correspondent Simon Gompertz said the market is already experiencing a marked winter slump.
Although activity traditionally slows at this time of year, Council of Mortgage Lenders figures show gross borrowing had tumbled to £12.4 billion in October - the lowest figure for the month in a decade.
The organisation's chairman Matthew Wyles recently forecast that total lending for the year will top £137 billion - down from £142 billion in 2009.
