UK Mortgage Availability Expected to Fall Over Next 3 Months
The Bank of England has revealed its prediction that the number of available mortgages will fall over the course of the next three months, which is a knock to the recovering UK property market.
If this prediction proves correct, it will be the first drop since the end of 2008. The demand for property loans has also fallen over the second quarter of 2010.
This news followed on from a report earlier this week which recorded that the mortgage approval trend was weaker than expected, with just £1.2 billion net funds loaned for properties in May, compared with £8 billion per month before the property crash. The slowdown was confirmed by Nationwide, which recorded a price increase of just 0.1 per cent in June.
In reference to the drop in the number of people entering the property market, the Bank of England explained the surprising turn of events to the Independent.co.uk: "Lenders had expected demand to increase in the past three months, as the temporary effects from factors such as cold weather and the ending of the stamp duty holiday waned."
"But, for some, that anticipated rebound in demand had not materialised. To explain the weakness in demand, those lenders cited continued uncertainty about the outlook for interest rates, employment and the macro economy more generally."
"Demand for secured lending for remortgaging was reported to have risen in the second quarter, for the first time since the end of 2008. Lenders were not anticipating further increases in remortgaging demand, given that many existing customers were borrowing at low standard variable rates."
Mortgages news posted by Garry on 02 July 2010
