The availability of mortgages has been “sharply reduced” since the onset of the credit crunch, a new report has noted.
Following the beginning of the downturn in the summer of 2007, high-risk borrowers in particular – such as those with poor credit records â€“ have been restricted from accessing home loans, a publication from the Bank of England has stated.
In addition, the Trends in Lending report showed that unsecured lending growth – which takes into account credit cards, unsecured loans and overdrafts â€“ has moderated since 2005, something that could lead to people needing debt help.
The Bank also explained that credit card providers have increasingly been charging fees on balance transfers, whereas these were usually offered on a zero per cent interest and fee-free basis.
Commenting on the report, the Council of Mortgage Lenders said that it demonstrated how homeowner finance must be given a boost in this year’s Budget.
“Any recovery in market activity is at a delicate stage, but would be enhanced by measures in the Budget to enable more lenders to provide more lending,” remarked director general Michael Coogan.
By Jamie Price