The number of people committing to take on a mortgage loan fell by around 22 per cent in December of last year, according to the latest figures from the Council of Mortgage Lenders (CML).
Around 62,000 mortgage loan deals were agreed in the final month of 2007, compared to about 78,000 in November and financial constraints and not lack of demand has been blamed for the fall in housing sector borrowing.
Fewer consumers can afford to take on a mortgage-related debt management burden in the wake of a series of rises in the base rate of interest since summer 2006, the CML has suggested.
However, despite its own report this week that an increasing number of Britons are facing repossession, the council has claimed that there is reason for its members and consumers to be optimistic.
“Affordability has been stretched further in 2007 but the recent base rate cuts and the expectation of future cuts will ease debt servicing burdens in 2008,” said the CML’s director general Michael Coogan.
Including mortgage arrears, the typical British household has a debt management burden worth in excess of £56,500, according to the Credit Action charity.