Fewer mortgages 'will not affect housing market'

The reduction in the number of mortgages available to borrowers will not have a detrimental effect on the housing sector, the Council of Mortgage Lenders (CML) has said.

Last week Moneyfacts reported that the number of mortgages on the market has fallen by 40 per cent over the past quarter, but the CML has suggested that market fundamentals will continue to support prices.

The organisation added that factors such as continued demand and a shortfall in the number of homes available meant that it was "comfortable with" more positive pronouncements such as that made by Monetary Policy Committee member Kate Barker earlier this week.

"I don’t think the availability of mortgages is going to be affected to such an extent that it will affect the housing market," said CML spokesperson Bernard Clark.

"I'm not sure there is a lack of confidence in the housing market overall. There are still strong aspirations to home ownership and any easing of prices would mean buyers who have been priced out of the market would have opportunities to enter the market and will take them," Mr Clark added.

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