Reduction in mortgage products 'will not affect house prices'

House prices will not be affected by a reduction in the number of mortgage products available, the Council of Mortgage Lenders (CML) has said.

CML spokesman Bernard Clarke said: "The housing market continues to be underpinned by consumer demand for owner occupation, strong aspirations for owner occupation and there''s a shortage of supply."

He added that the lower number of mortgages since the recent credit crunch will not affect the market much beyond the sub-prime sector, while strong demand and poor supply of homes would "underpin" the housing market.

Mr Clarke added that the CML believed Bank of England monetary policy committee member Kate Barker was right when she said last week there was no reason why the credit crunch should cause a major slowdown.

Although figures published by the Bank of England on Friday showed a fall in mortgage figures, the Royal Institution of Chartered Surveyors pointed out that mortgage approvals were still "above the long run average".

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