July was another challenging month for anyone looking to buy property or sell a home, with a housing supply and a lack of mortgage lending continuing to hamper the market. High street banks have been announcing vast profits for the first half of 2010 and as a result there have been renewed warnings from the Government to increase lending or face a tax on profits.

While the National Association of Estate Agents echoes these calls, the Government must get tougher in order to get more money into the mortgage market. Indeed, despite a doubled profit for the last six months of £7.2 billion, HSBC increased its mortgage lending by just 3% and has already made clear that it would be unwilling to follow government-set lending targets.

In order to secure a mortgage, buyers still require a seriously hefty deposit, which explains why the steady increase in the numbers of house hunters registered at NAEA branches has not translated into increased mortgage lending and house sales. Mortgage providers are continuing to ration the size of their loans to home buyers and those remortgaging.

Additionally, only 8% of deals are currently available to borrowers with 10% deposits, and these come at the price of significant interest rates and strict lending criteria, resulting in the decreasing loan approval rates we are seeing now.

Certainly the lack of mortgage finance is a huge factor in the recent housing market reversal. However, a recent Bank of England report suggests the situation is not going to improve in the short-term.

The increase in the Stamp Duty threshold earlier this year went some way to helping first-time buyers, but many in the current mortgage climate are still put off by the deposit that first-time buyers need to find. In light of this, we will continue to urge the Government to consider a US style First-Time Home Buyer tax credit incentive to further stimulate the housing market.

We also welcomed Grant Shapps’ announcement to retain and refocus the mortgage rescue scheme, which is a vital safety net for homeowners struggling to meet mortgage repayments, despite the drive for austerity. Nevertheless, the strict eligibility requirements of the scheme at present, means only a small number of households have received assistance. We await with interest the full impact of these changes.

The new Government must consider the issues affecting the whole spectrum of people within the housing market when looking at ways to foster a recovery in the property market. A recovery seriously threatened by the ongoing lack of mortgage availability.