No end in sight for UK mortgage drought

The last four months of 2010 saw a reduction in the demand from UK property buyers in response to severe financial hardship for many of the population.

Rising prices and taxes across the board together with further job cuts has had a detrimental effect on buyer confidence throughout the country.

Although the Bank of England continues to support the record low interest rate of 0.5 per cent and other banks and building societies have yet to loosen the tight restrictions on home loans.

The middle to upper end of the property chain remains quite buoyant with sales activity levels as buyers here generally have easier access to funds due to years of equity build up, but at the lower end of the market including flats and 1 or 2 bedroom properties sales remain flat due to the absence of first time buyers unable to afford the large deposits now required.

Lenders need to extend loans to this sector to ensure the housing market is in a position to move on.