Report claims lenders being less stringent over home loans

Whilst lenders have been exercising increased stringency when it comes to home loans and other types of finance since the onset of the global credit crunch a recent report has suggested that some lenders may be easing up on their lending criteria now.

This could mean that consumers will find it a little easier to get home loans and mortgages, although these loans are nowhere near as easily available as they were before the credit crunch.

The difficulties that have been experienced in the mortgage market have resulted in a serious negative impact on the housing sector, with property prices plunging and property sales falling through the floor over recent months. Lenders have brought far more stringent lending regulations in since the global credit crunch gripped the country, and many people have found themselves unable to get a home loan and other types of finance.

Addressing the Financial Services Authority, which is the UK’s financial regulator, earlier this year, Gordon Brown, the Prime Minister discussed phasing out low deposit mortgages. The PM said that low deposit mortgages could prove too risky, and he wanted the FSA to consider phasing out mortgages of less than 10 percent deposit. Already, mainstream 100 percent mortgages, which were very popular with first time buyers, have been taken off the shelves.

However, the Prime Minister’s discussions have caused concern amongst some industry officials, who are worried that phasing out lower deposit mortgages would further impact on the recovery of the property market, as many people would be unable to afford mortgages, which would affect property sales figures and prices. There were also concerns that confidence levels in the property market would fall if these measures were taken.

Tags: industry officials, home loans, 100 percent mortgages, stringency, Credit (finance), Real estate