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Housing Market Continues to Decline

UK Mortgage lending and approval numbers in the UK from the Bank of England has continued to stay at a low level throughout February, as the housing market continues to struggle from the current economic downturn.

The trend follows on from that of January, with gross mortgage lending throughout February being estimated at around £9.5 billion, according to the Council of Mortgage Lenders (CML). Again forecasts for 2011 are not looking good, with the lenders group declaring that 2011 will be ‘challenging’ for the housing market.

One of the reasons attributed to the poor figures is the fact that a shortage of homes has caused rents to rise for tenants as they rose by 0.2% in February, averaging £684 a month.

Lending has remained weak because banks have been restricted on top of the fact that there has been little motivation for new borrowing among people who fear for their job security.

These tough conditions have also had a negative effect on the rental market in February, with tenants falling behind on their rental payments, and the average price of rent rising, although there were regional variations throughout England and Wales.

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