The Shaky Recovery Of The Mortgage and Remortgage Market
Since the market crash of 2008, buyers and home owners looking to remortgage have found it very difficult indeed to find a lender who is willing to lend them money in order to purchase a property or remortgage their home. But there are signs that the markets are recovering with lending back on the up.
100% mortgages and mortgages offered to those with poor credit history, also known as sub-prime mortgages were blamed for the crash when it all started, and this led to many mortgage lenders becoming unwilling to lend. But now that it is clearly starting to recover, and property prices are increasing, lenders are now more enthusiastic about lending to home buyers or people looking for a remortgage.
Economists actually predicted that the markets would recover more rapidly than they have done, with most mortgage lending predictions being way off the mark. However, in spite of this, the news that there is any recovery at all after three years of a gloomy outlook is welcome to most, especially those who have been waiting to buy or sell a property.
There are always seasonal fluctuations in mortgage approvals based on Britain’s climate and culture. This fluctuation in the rate of mortgage approvals is often predictable and cyclical. Estate agents are often quick to point out that that the market traditionally slows down towards the end of the year, usually starting at around September time.
As the housing market quietens, fewer buyers will register with estate agents and this results in a reduction in the number of properties sold. These seasonal variations had a big impact during the global financial crisis as the market was already struggling, although as Britain comes out of recession the housing market is more able to cope with seasonal variations.
Remortgage markets do appear to be recovering steadily, however it has been noticed that there are far fewer first time buyers who are looking to get on the property ladder. This is believed to be down to the fact that although lending is back on the increase, banks and other lenders are still slightly pessimistic about lending to those who do not have an extremely strong financial background, or a relatively large deposit.
The number of first time buyers however, has historically not been necessarily correlated to lending figures, and so there may be other reasons for the drop in buyers seeking their first home.
As the market in the UK can vary so suddenly, economists have found it hard to predict long term trends. Some organisations, such as the National Association of Estate Agents (NAEA) have called for the government to intervene in order to help the recovery of the housing market.
The property related markets are not the only place we’re seeing recovery either. Unsecured lending is also back on the increase and is rising steadily, which is a good sign of things to come for the future, when we’re likely to see a much healthier economy in the UK.
Some experts believe that house prices will once again start to fall over the next few months. Whilst this may benefit cash buyers or those people with a large deposit, vendors may once again be facing bad news as they look to sell their homes.
Timothy Frodsham writes for JustRemortgages.com one of the UK’s top sites for the latest remortgage rates and best remortgage deals.