Mortgage lending cuts expected

Mortgage availability will continue to fall in the coming months as lenders tighten the criteria in the face of rising defaults, the Bank of England has said. Banks said they had reigned in mortgage lending during the three months to mid-June, with many anticipating further cutbacks during the third quarter as the economic outlook continues to worsen. They also plan to further tighten their lending crit eria, with continued increases in the size of the deposits they demand from borrowers, although the cost of mortgages looks set to remain broadly unchanged. The Bank of England's Credit Conditions Survey found that a net balance of 47% of lenders had reduced mortgage availability during the three months to mid-June, with a balance of 22% anticipating further cut backs going forward. The main issue driving their reluctance to... [read full story]