Who Are The Banks Lending To?

12 Mar

Although, all lending remains woefully low, what lending there is, the banks and building societies are lending more to landlords rather than ordinary homeowners or first-time buyers. These are the results from a recent mortgage data study.

It seems most likely that this is caused by the buoyant rental market driving optimistic landlords to further property purchases and increased borrowings, while homeowners or would be homeowners are paying down debts and sitting tight. This situation is expected to continue through 2012. I believe this situation will continue until government intervention or further failings in the property market, where higher rent defaults are feared.

The situation has led to requests for banks to do more to help younger homeowners, first-time buyers and for the Government to increase the tax burden on landlords.

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