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Tuesday, December 21, 2010

Lending to push prices lower

The Council of Mortgage Lenders has warned that house prices next year could be forced lower as lenders become even more cautionary in their lending policy.  They warned that:

“From April next year onwards, lenders will begin to have to repay the funding advanced through official support schemes. This is likely to limit the availability of credit to support mortgage lending next year and beyond.”

The CML is predicting 0.86 million housing transactions next year, down from this year’s estimate of 0.89 million.  It thinks the number of loans will shrink to £6bn, down from an estimated £9bn this year. It also thinks that arrears will climb from 175,000 to 180,000 and that possessions next year will creep up from 36,000 to 40,000. It has also forecast that remortgaging will remain subdued.

All this means that landlords with access to funds and capital should next year be able to pick up residential investment properties at very competitive prices.

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