'Self serving' lenders slated by NAEA boss

Lenders have been sharply criticised by the NAEA for holding back the housing market.

Chief executive Peter Bolton King hit out at the “stubborn refusal of major lenders to loosen their self-serving restrictions on mortgage lending”.

Forecasting the market in 2011, Bolton King predicted the rise of ‘postcode power’  as premium areas emerge from the slump at a faster rate than others.

But he warned that any recovery will be strongly dependent on the major lenders making mortgage finance more available.

He said: “Bank of England decisions on interest rates will also have a major effect on the market. The monthly wait for the MPC’s decision on interest rates will be a nervous time for both existing and potential borrowers.”

Forecasting a tough year, he said he was confident that no widespread drop in house prices would occur.

He said: “An historically low rate of interest has benefited those people who already have a mortgage, but it is likely that over the next 12 months it will rise. That will place more pressure on existing borrowers and also remove mortgages from the reach of even those house buyers with large deposits.

“The danger is that a backlog of pent-up demand for property emerges. That means the market will suffer from lack of demand in the short term and potentially be distorted by a rush of demand when these people can finally get on to the ladder.”

He added: “We do not believe that there will be a widespread fall in house prices over the next 12 months. There will be ups and downs, but I’m confident that we won’t see a plunge.

“What we will see is the emergence of ‘postcode power’ – as demand for property in some areas fuels a healthy market while other less desirable areas are in danger of being left behind.”