South African lenders have shrunk residential mortgage loans to households by 4.8% in real terms in the 10 years to 2018. Stringent lending criteria after the subprime mortgage bubble in the US and the introduction of the Consumer Protection Act have made financial services providers overly cautious, resulting in what Stanlib chief economist Kevin Lings called a “pathetic” mortgage lending rate in the country. During the Investment Forum in Sandton on Wednesday, Lings called the rate at which banks are lending to people to put a roof over their heads “pathetic” and it’s easy to see why. According to the Reserve Bank BA900s economic return data, financial institutions gave R10.9bn in residential mortgage loans to the household sector in 2018. This equates to a 40% nominal growth in residential mortgages to households since 2008 when these institutions lent R7.7bn to consumers. It’s a huge increase, until you factor in house price inflation over that period. The FNB house price inde...

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