Financing ‘causing problems in house-selling chains’

A lack of financing is causing problems for those involved in housing market chains, one expert has suggested.

Situations where buyers are reliant on other people in a chain in order to be able to move house are being increasingly affected by stricter lending, according to Ray Boulger, senior technical manager at mortgage adviser John Charcol.

He said: “If you have got a chain of four of five people [and] one person can’t get the mortgage … they end up not being able to complete because of that one person.”

This has led to a fall off in the number of people completing property transactions after being successful at the application stage, Mr Boulger added.

While there has been an increase in activity, he remarked, it will not begin to recover in a meaningful way until prospective buyers are able to borrow.

His comments come after the Council of Mortgage Lenders announced that gross mortgage lending for the second quarter of 2009 is the lowest since the first three months of 2001.

By Francis Finch