- Home
- Real Estate
- Mortgage Availability Remains on Shaky Foundations, Leaving Most of the Market Volatile
Mortgage Availability Remains on Shaky Foundations, Leaving Most of the Market Volatile
- By Howard Ogollegos
- Published 10/13/2011
- Real Estate
- Unrated
In recent months we have witnessed a sharp decline in the rate of mortgage lending, casting a shadow over the economic recovery. Official figures from the Bank of England indicate that the overall rate of increase is slowing down, which means that the housing market, sustained only by historically low interest rates, may be heading for a slump
Net lending that was lent out against the value of homes rose only marginally, which is in stark contrast to the January to February figures, which witnessed a significant rise.
Financial Analysts Global Insight have revealed that the latest figures are down on quarterly trends and that first quarter approvals are in excess of 10,000 down in comparison to the fourth quarter of last year. Even worse, they are almost 50% below the level considered indicative of a stable housing market.
One industry insider has claimed that the significant boost in house sales and in lending, that took place in the last quarter of the previous year, might have indicated an early boom in the housing market, owing to a higher number of first time buyers than usual looking to enter the market and get a foot on the property ladder.
Whilst lower than expected numbers of mortgage and remortgage approvals are adversely affecting the industry, it may not be such a bad thing for buyers looking to enter the housing market.
Rising house prices should not automatically be expected in the current economic climate
, according to the economic think tank Global Insight. The group believes that high unemployment and underemployment are not conducive to rising house prices, particularly in a market where banks and building societies are reluctant to lend and good remortgage rates are few and far between.
Industry commentators have claimed that the rate of loan approvals might see an even a further decrease in the coming quarter, though they also advise consumers that there are still deals available. These are deals which do offer reasonable remortgage rates. Bob Pannell, the chief economist of the Council of Mortgage Lenders, has stated cautiously that the property market is facing a 'hesitant recovery from hibernation'.
Household finances are under a lot of pressure, said Mr Parnell, adding "and as a result demand for house purchase loans fell in the first three months of 2011."
The Council of Mortgage Lenders have said that it is clear that we will see increases in property values, mortgage lending and unsecured debts over the next 12 months or so, which is promising as this will all aid the recovery of the UK financial markets, and homebuyers or those looking to remortgage will have the opportunities they have been seeking.
The spokesperson also confirmed that demand is still very high for remortgages at present, and so competition between lenders is something that homeowners can take advantage of at this time. When the market is saturated with people looking to find a great remortgage deal, the price is driven down, so you should take the opportunity while you can.
Net lending that was lent out against the value of homes rose only marginally, which is in stark contrast to the January to February figures, which witnessed a significant rise.
Financial Analysts Global Insight have revealed that the latest figures are down on quarterly trends and that first quarter approvals are in excess of 10,000 down in comparison to the fourth quarter of last year. Even worse, they are almost 50% below the level considered indicative of a stable housing market.
One industry insider has claimed that the significant boost in house sales and in lending, that took place in the last quarter of the previous year, might have indicated an early boom in the housing market, owing to a higher number of first time buyers than usual looking to enter the market and get a foot on the property ladder.
Whilst lower than expected numbers of mortgage and remortgage approvals are adversely affecting the industry, it may not be such a bad thing for buyers looking to enter the housing market.
Rising house prices should not automatically be expected in the current economic climate
Industry commentators have claimed that the rate of loan approvals might see an even a further decrease in the coming quarter, though they also advise consumers that there are still deals available. These are deals which do offer reasonable remortgage rates. Bob Pannell, the chief economist of the Council of Mortgage Lenders, has stated cautiously that the property market is facing a 'hesitant recovery from hibernation'.
Household finances are under a lot of pressure, said Mr Parnell, adding "and as a result demand for house purchase loans fell in the first three months of 2011."
The Council of Mortgage Lenders have said that it is clear that we will see increases in property values, mortgage lending and unsecured debts over the next 12 months or so, which is promising as this will all aid the recovery of the UK financial markets, and homebuyers or those looking to remortgage will have the opportunities they have been seeking.
The spokesperson also confirmed that demand is still very high for remortgages at present, and so competition between lenders is something that homeowners can take advantage of at this time. When the market is saturated with people looking to find a great remortgage deal, the price is driven down, so you should take the opportunity while you can.
Howard Ogollegos
Howard O'Gollegos writes for Just Commercial Mortgages.com the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.
View all articles by Howard Ogollegos