FSA data illustrates tough mortgage market
Homebuyers are still having to save for a deposit of up to 50 per cent to get a mortgage, FSA figures have revealed.
The City watchdog’s latest mortgage product sale data showed the most popular loan to value band for mortgages was 50-75 per cent, representing 37 per cent of sales.
However, the regulator said there were increases in 85 to 95 LTV product sales in 2011.
The data showed mortgage sales between 1 April 2011 and 31 March 2012 increased by 3.7 per cent, driven by remortgages and first-time buyers.
It said banks provided most mortgages, with 69 per cent market share, while building societies had 18 per cent but were seeing their share grow.
The FSA said: “Economic and financial conditions during the period under study were unsupportive of the mortgage market; real disposable income declined, unemployment rose, and the UK economy re-entered recession.
“The intensification of the euro area sovereign crisis raised funding costs for mortgage lenders, some of which has been passed onto consumers.
“This, together with the still uncertain economic outlook and limited availability of wholesale funding, has caused banks to tighten lending criteria.”