Mortgage lending starts to pick up

Over the past year mortgage lending in the UK has remained very subdued, having gone through a very turbulent and difficult period after the global financial crisis and recession wreaked havoc across the nation’s financial markets. Many people have struggled to get a mortgage over the past year or two, which has resulted in fewer people being able to buy property and far more people having to rent a home.

However, there is some good news on the horizon as recent reports have revealed that mortgage lending levels have increased for a third month in a row, sparking hopes that property sales could start to increase as a result of this. Approvals are now said to be 3 percent higher than they were in July of last year, which is promising news. However, many first time buyers will still struggle to find a deposit for a mortgage, which will continue to cause a problem on the mortgage and property markets.

Despite this news, figures relating to property sales have shown that so far this year property sales have been stagnating. Figures were released by HM Revenue and Customs, showing that in July there were 79,000 property sales. This was the highest number of sales so far this year according to the figures but it was still a lower figure than a year ago.

One economist said that compared to long term trends and norms housing activity was still very low at present despite increases in mortgage approvals.

He said: “With consumer confidence weak and the economic outlook currently looking pretty grim, we see little reason to change our view that modest falls in house prices are more likely than not over the coming months.”

Tags: horizon, recession, economist, outlook, home, July, property, term trends

Britain facing recession by end of year

Over recent weeks a number of industry professionals and groups have said that Britain will slide into recession by the end of the year. The latest warning comes from the European Union, which has warned that a number of countries face recession by the end of this year. There was also a stark warning from the Organisation for Economic Co-operation and Development, which said that Britain has the worst outlook of any major economy when it comes to growth. Read more

Tags: European Union, outlook, recession, european, Economic history, key financial markets, Co-operation

Buy-to-let mortgage market affected by credit crunch

The UK’s buy-to-let mortgage market is being adversely affected by the recent credit crunch, according to a financial website.

Research from Moneyfacts.co.uk indicates that it is becoming increasingly difficult for potential property investors to obtain a buy-to-let mortgage as more and more lenders are raising the cost of taking out such a loan.

It is also thought that some lenders have decreased the number of products they have available for potential borrowers.

“The trend over recent years has been a falling rental income cover requirement, so with lenders reversing this trend, it’s a definite sign that some are taking a more cautious outlook,” commented Moneyfacts mortgage expert Julia Harris.

Nonetheless, she did note that while the buy-to-let market is “taking a battering at the moment” if you are prepared to look “there are still some very competitive deals to be found”.

“Perhaps lenders are just taking a breather, giving them time to evaluate the market and perhaps re-launch with re-priced products, which will more than likely be at a higher rate.”

Tags: launch, borrowers, property investors, market, outlook, rate, property, moment

FTBs struggling more than ever

It is more difficult for a first-time buyer (FTB) to get onto the property ladder now than it has ever been before.

That is according to housing charity Shelter which has carried out a study into FTBs and found that increasing house prices are leaving them without a chance of making a purchase.

Shelter found that it is nearly twice as hard for an FTB to get onto the property ladder today than it was ten years ago.

This conclusion is based on the gap between how much people earn and the costs of a mortgage, with the gap today being larger than ever.

“These figures show the gulf between those who can afford to buy and those who can’t is widening at an alarming rate,” explained Adam Sampson, chief executive of Shelter.

“For first-time buyers, the housing ladder is becoming a housing tightrope. Buying a home is becoming an ever-more distant dream for first-time buyers and as housing becomes increasingly unaffordable, repossessions are likely to spiral and more families will face the nightmare of homelessness.”

Although the outlook is bleak for the majority of regions in England, Shelter points out that the South East and the East Midlands have shown slight improvements in affordability.

Tags: repossessions, ladder, charity, study, Economy of the Republic of Ireland