14:22 PM, 26th November 2010, About 12 years ago
At last some truths about mortgage lending are starting to emerge from the smoke and mirrors propaganda billowing out from the Council of Mortgage Lenders – the cosy club that represents all of the UK’s big banks and building societies.
Mortgage lending has hit rock bottom with the lowest figures for almost a decade, according to the latest data from the CML.
The CML’s outgoing chairman Matthew Wyles told the group’s conference banks and building societies would like to see a mortgage market lending between £200 – £250 billion a year rather than the miserly current figure of £137 billion for this year.
Gross lending in October was £12.4 billion – unchanged from September but down 9% from £13.6 billion in October 2009.
The CML blames everyone else for the problem and is mounting a savage media campaign against the Financial Services Authority mortgage market review (MMR) aimed at cleaning up bad lending practices that contributed to the credit crisis and house price inflation.
The housing market is gripped with a vicelike squeeze from the CML’s members seemingly acting like a cartel by setting monthly lending thresholds. It cannot be coincidence that so many banks and building societies agreed more or less the same number of mortgages and the same amount of money in loans month after month.
The CML claims tighter regulation will stop them lending – well, it seems that’s already happened.
Other figures revealed by BM Solutions, the buy to let arm of Lloyds TSB, show the company has a 40% share of the buy to let market with £10 billion of lending in 2010 against £47 billion before the credit crunch.
To most homeowners and investors, it would seem banks and building societies are not lending because they have decided to cherry pick only those with impeccable credit references and leave the rest to chance.
Mr Wyles even hinted as much in his speech with an aside remark that anyone wishing to buy a home should ‘cherish’ their credit rating.
This was backed up in an interview by Phil Rickards, head of sales at BM Solutions, who said mortgage lending is unlikely to free up next year and the MMR would mean tighter underwriting – with tough rules for verifying income.