Residential property builders lash out at banks

Leading homebuilders Barratt and Redrow have complained that restrictions on mortgage financing is preventing a recovery in the country’s property market.

Chief Executive of Redrow, Mark Clare said, ‘In the recent six months we have seen higher sales rates, lower cancellations and prices levelling. We are not, however, going to see a sustained improvement in trading conditions until the availability of mortgage finance, particularly in the higher loan to value segment, recovers.’

Bovis Homes have reported that potential buyers are still unable to get a mortgage, although there is continued interest in their developments. Persimmon have seen an increase in reservations but also hit out at the lack of lending. ‘We are encouraged by the improvement in sales rates when compared to last year but will remain cautious until mortgage availability improves further and employment prospects stabilise,’ they said.

The mortgage market has been particularly tough on first time buyers, with lenders still reluctant to advance more than 75% of the value of a property. More first time buyers cannot afford the large deposits lenders are demanding, and are having to get help from their parents.

Source: 11/07/09