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NewsArticle-16-01-2011

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Mortgage supply the problem, not lack of demand

With significant increases in New Year visitor levels to new developments being reported, senior business leaders have expressed their continuing frustration with ongoing restrictions in the mortgage market.

Following a Board meeting of industry body Homes for Scotland, Chief Executive Jonathan Fair (right) said:

“2010 was another difficult year for home builders as mortgage lending continued to be restricted. Three years into the downturn, and as the Council of Mortgage Lenders forecasts more of the same for 2011, this situation can no longer continue. The evidence on the ground does not support the rather disingenuous assertion made by some lenders that there is actually “no demand” for mortgages. The fact of the matter is that many lenders have been tightening their lending criteria and reducing their loan to value ratios in an effort to smother demand before it even blossoms.

“We now need to build on the momentum of buyer interest and the more positive market sentiment that has been shown in the last couple of weeks if the housing market is to have any chance of enjoying a sustainable recovery.”

Ends

Enquiries to:
Jennifer Kennedy, Homes for Scotland – 0131 455 8350 / 07763 240694

Notes to Editors:

Homes for Scotland represents the country’s home building industry which, prior to the onset of the credit crunch,:

- was the largest source of private investment in Scotland and the largest user of the planning system
- built 20,000 new private homes each year, contributed £6bn to the economy and supported the employment of 100,000 people (2007 figures)

As a result of the economic downturn, housing supply is now touching all time lows. This is having far-reaching and long-term social and economic consequences for Scotland's population.

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