Banks neglecting the foundations of lending: West One

The director of short-term secured lender West One Loans said: “Banks are adding extra floors to the property market, but neglecting the foundations.

“Lending to people queuing up to buy a home is growing rapidly. And quite right too. But lending to the businesses that can create more homes is still falling.”

He said that mainstream lenders were “flogging” a lot of mortgages, but they were still in retreat when it came to developing and refurbishing new properties and converting buildings into the new homes the market needed.

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Mr Kreeger added: “It is totally illogical and it is bad for the property market – especially in London where supply is so limited.

“Fortunately, alternative lenders are not afraid to take on the responsibility. In the absence of the high-street lenders, we are underpinning the future of the property market.”

His comments after data last week from the British Bankers’ Association revealed that April saw new gross mortgage lending of £12.2bn, with net lending of £1.1bn.

Adviser View

Jonathan Harris, director of London-based mortgage broker Anderson Harris, said: “With the BBA revealing that April saw the highest monthly total of new mortgages since August 2008, confidence continues in the housing market, with lenders also willing to lend.

“While there is no need for borrowers to panic, it is important to consider whether you can afford any mortgage you take on and to opt for a fixed rate if you are concerned about budgeting.”