Prospective buyers choose to rent as costly banks dominate lending

03 2008
Banks are coming to dominate the UK mortgage market, leading to growing numbers of first-time buyers opting to stay in the rental sector for the time being rather than agree to high fees.

That is according to the money website Fool.co.uk, which found that many building societies and other non-traditional lenders have pulled out of the mortgage market as the look to insulate themselves against the global credit crunch.

David Kuo, Head of personal finance at the website, explained: "The increasing dominance of banks in the market for new mortgages is a worry for anyone looking to step onto the housing ladder.

"The once level playing field that borrowers could count on for competitive rates has been tilted in favour of banks. Even worse, banks are offering unattractive deals knowing that customers are faced with little option but to accept them."

The comments come on the back of new statistics published by the Bank of England which show that the number of mortgage approvals granted declined by 14 per cent in May in comparison to the same month last year, with just £5.8 billion was advanced to Britons looking to buy a property in comparison to £16.9 billion last year.ADNFCR-1219-ID-18669161-ADNFCR

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