Housing market 'yet to return to pre-credit crunch days'

Last December, mortgage lending increased by £1.2 billion, a new report has revealed.

According to the Lending to Individuals report from the Bank of England, the number of loan approvals for house purchase (59,023) was lower than the November figure (60,045) but above the previous six-month average (55,004).

Meanwhile, the 12-month growth mortgage rate was 0.9 per cent, a fall of 0.1 percentage points from a revised one per cent for November.

However, despite these figures, one sector commentator has claimed this does not signal a return to the lending and spending habits of the pre-credit crunch days.

Ed Bowsher, head of consumer finance at lovemoney.com, said: "The whole economic crisis was a huge shock for us and I think people don't want to make the same mistakes twice. They are trying not to borrow as much, they are trying to save and they are trying to repair their finances."

Indeed, Britons may have chosen flats to rent in Wandsworth or another part of London to save money on paying an expensive mortgage as they attempt to rebuild their savings.

Choosing property to rent in London may still be a more affordable option than buying in the city for many people.

Written by Chris Price

Published 4th February, 2010

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