Mortgage market 'subdued in June' Published: 13/08/2008

Prospective homeowners are borrowing less as lending criteria is tightened in the current housing market, new research reveals.

A study by the Council of Mortgage Lenders found that the average first-time buyer borrowed 3.33 times their income in June.

This was slightly down from 3.35 times their income in May, while the figures also revealed the average mover borrowed 2.94 times their income – a slight dip on 2.97 the previous month.

First-time property buyer loans were worth £2.3 billion in June, with some 18,100 loans taken out.

This represented an eight per cent decline in volume and a nine per cent fall in value from the previous month.

Figures also revealed gross lending was down four per cent to £23.6 billion between May and June.

Bob Pannell, head of research at the Council of Mortgage Lenders, said: "Mortgage lending activity remains relatively weak and will decline further in the coming months as a result of funding constraints and lower consumer demand.

"The majority of lending continues to be to people with larger deposits, which is prudent for borrowers and lenders in a slowing housing market."

Get a mortgage quote  © Copyright.