CML: Crunch putting borrowers off

The Bank of England's latest credit report suggests lenders felt failing house prices has effected people’s willingness to borrow money coupled with a inadequate supply of wholesale funding over the past quarter, but that they also noted a decline in demand for loans for house purchases.

According to the CML, this tallies up with the evidence it has gathered, indicating that many people who would take out mortgages in a normal market are not even seeking to obtain one now, because they do not believe they will succeed in their application.

The CML therefore highlighted the need for concerted action to remedy the shortfall in wholesale funds, arguing that the lack of finance available to lenders will continue unless the mortgage securitisation and covered bond markets are reopened.