Tightening conditions 'bad for first-time buyers'

In news which may interest those considering the self build option to acquire a home, it has been predicted that lending conditions for first-time buyers will become worse in the next few months despite cuts in interest rates.

The prediction was made by Simon Rubinsohn, chief economist for the Royal Institution of Chartered Surveyors, who was responding to news from the Council of Mortgage Lenders (CML) that there was a 25 per cent decline in gross mortgage lending in December 2007 as the credit crunch took hold.

December's gross lending was £22.6 billion, compared with £29.9 billion.

Normally, there would only be a seasonally-affected reduction of six per cent between the two months, the CML said.

Mr Rubinsohn commented: "The tougher lending environment is likely to be particularly problematic for first-time buyers," suggesting this would be due to lower loan-to-value deals on offer and increasing deposit sizes.


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