Housing gloom for a few more years

MORTGAGE lenders have predicted that housing market activity will remain muted for years to come after new figures showed remortgaging levels have reached a ten-year low.

The number of loans approved for house purchase fell by 8 per cent in August, with a 5 per cent slump in mortgages for first-time buyers, according to the Council of Mortgages.

The CML said remortgaging accounted for just a quarter of the loans advanced over the month, the lowest proportion for a decade and down 13 per cent from July.

Michael Coogan, director general, said lending would remain subdued for the foreseeable future.

"While we do not know what the impact of the comprehensive spending review will be on our sector, it will clearly contain austerity measures that will likely further dampen consumers' appetite to borrow," he said.

And there is little chance of activity picking up in 2011. "With some uncertainty surrounding future house price trends, we would expect a muted market in the next few years," said Mr Coogan.