Council of Mortgage Lenders head of policy Jackie Benn-ett said it may be 18 months before the funding position recovers completely. She said the securitisation market may never recover. Even when funding issues have been largely resolved, lenders are still likely to make borrowers pay a 5 or 10 per cent deposit.
Wriglesworth Consultancy managing director John Wriglesworth said the market conditions will last until the end of next year while CML economist Jim Cunningham said lenders might start to compete for business in 12 to 18 months.
Cunningham said: “We are seeing rationing by price and lending criteria. Towards the end of this year and into next year, I think the supply constraint will ease a bit. There are financial pressures on households. Demand will soften and the situation will change from being supply-constrained to supply moving more in line with weakening demand. Lenders might then start to compete as we have seen them compete before.”