Mortgage lending 'to become more common in 2011 and beyond'

Home credit lending will increase in the near future, an expert has said.

Taking out home credit packages such as tracker mortgage deals will become more common in the UK over the coming years as the country continues its recovery following the global economic downturn.

That is according to Cath Hearnden, director at My Mortgage Direct, who believes that there will be an increase in both mortgage lending and remortgaging activity in the near future.

She explained that "the market is never going to stagnate" as "there is always going to be some movement" regardless of the state of the wider economy.

Ms Hearnden continued: "Inflation is going to be higher next year, they mentioned a possible rise in interest rates and already people are starting to think that they should be coming off of those variable rates and start to fix their rates."

This comes after the Council of Mortgage Lenders (CML) last week (December 15th 2010) published a report detailing the damaging impact the worldwide recession has had on the British home credit sector.

According to the CML, the recent level of sales means that each property in the UK's stock of 18 million privately-owned homes is now only changing hands at a rate of once every 20 years.

Therefore, the nation has moved from a period when transactions involving residences numbered 1.6 million annually to a time when this yearly figure is now somewhere around the 900,000 mark.

The organisation's data appears to show that there will be a limit on the availability of credit to support mortgage lending in 2011 and beyond, but while Ms Hearnden accepts that this may be the case for first-time buyers, for those with a small deposit or self-employed purchasers, she maintained that there will be some fluidity in the near future.

"The market will move, I just don't think it is going to take off. That is probably a good thing," she concluded.