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Mortgage lending fell in 2019

2019 saw the first fall in annual gross mortgage lending since 2010, the UK Finance Household Finance Review (Q4 2019) has revealed.

There was a decline of new loans for both residential and buy-to-let purchase products, while first-time volumes fell by 0.6%.

Shaun Church, director at Private Finance, said: “The fact that first-time buyer numbers fell in all but two English regions last year is a timely reminder for the new Chancellor ahead of his Budget debut next week that the foundations of the property market still need some care and attention.

“The Help to Buy equity loan scheme continues to exist on borrowed time, while homemovers’ struggles to climb up the ladder aren’t doing any favours in terms of freeing up housing stock.

“Too many people are facing an upwards challenge to upsize, or a downsizing dilemma whereby the sums of money involved can make it difficult to see whether it’s even worth exploring a move.

“After years of watching an increasingly clogged-up market, it’s high time for another round of surgery to stamp duty rules to make moving more practical at both ends of the housing ladder.”

Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “The fall in mortgage lending highlights what we’ve known for some time; that there is a real lack of suitable properties at the more affordable end of the market.

“When you also consider the closure of the government’s Help To Buy ISA – there will be even more pressure on the new Chancellor Rishi Sunak to deliver for first-time buyers in next week’s Budget.”

Andrew Montlake, managing director of London-based broker Coreco, said: “The number of people on standard variable rates has been falling steadily for several years now as more and more borrowers get wise to how punitive they can be.

“For SVR mortgages to have fallen by over a million in just four years shows the public have woken up and smelt the coffee.

“Clearly there’s still a lot of work to be done in educating people around the perils of inertia and lenders need to be more proactive in helping mortgage prisoners off SVRs onto more competitive rates.

“The industry has started to address the issue of mortgage prisoners in earnest and the hope is that we see concerted action soon.”