It appears that the main UK banks are still being tight when it comes to offering mortgages.  This is according to the British Bankers’ Association.

The British Bankers’ Association said that the subdued lending was partly due to worries with the economy.

It also appears that those renting a home in the UK are feeling the strain.  Rental accommodation is sparse at the moment according to a recent study.

A lack of supply of new rental properties was witnessed across the UK but especially in the South of the country.  The lack of supply for these properties in the UK was partly due to potential landlords not being able to borrow money to buy properties in order to let them out.

Lack of supply is also pushing up rent prices at a time when budgets are already tight.  This is pushing many people into poverty.

In other housing news, there has been a very big rise in the proportion of home buyers in the UK paying in cash for their properties.

Figures show that in January this year, nearly 40% of the people who purchased properties paid with cash and did not require any borrowing.

These figures would suggest that the housing market in the UK is favouring those with a lot of money in the bank and shutting out other buyers who would need to borrow money to secure these properties.

As lenders in the UK have made their loan criteria stricter and asked for large deposits, people who are paying with cash have become a very big force in the housing market.

In some areas of London the figures are even higher with up to 80% of homes being bought with cash in some areas.

It is thought that these cash buyers are purchasing these homes due to the low property prices and they see this as an investment which they can make money from in the long run.

So what implications does this have for the UK housing market?  Well, the increase in cash sales will most likely have a mixed outcome.  No matter if the sales come from cash or borrowing, it will support the market which is a good thing and because these properties have no mortgage on them, there’s no risk of default and repossessions.

On the flip side, those people in the UK without access money will be squeezed out of the housing market if the trend of cash buying continues.

The UK government have gone on record as saying that it acknowledges the problem with the housing market and is taking steps to help.

Housing Market Update May 2011 is an original article from Free Debt Advice UK

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