Renting the attractive option as fewer people take out loans for house purchase

11 2008
The number of loans taken out for house purchase continued on a downward spiral as more people chooe to rent than buy.

The latest figures produced by the Council of Mortgage Lenders (CML) shows 19 per cent fewer loans were taken out for house purchase in January than they were in December.

In value terms, the fall was 19 per cent from £9.4 billion in December to £7.8 billion in January.

According to the CML's director general Michael Coogan, first-time buyers in particular are struggling in the current financial climate.

They are therefore more likely to consider renting, especially if the alternative is to overstretch themselves financially in an attempt to climb onto the first rung of the property ladder no matter what the cost.

"The wholesale funding markets remain largely closed and mortgage funding still remains constrained," he commented.

"This is now having a discernible impact on lending criteria and the ability of first-time buyers to get into the housing market."
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