What exactly is the scenario prevailing in the property market?
Shrinking mortgages continues to be a worry. Analysis and data by various market experts and institutions like the CML have brought to fore the quick contraction witnessed in the mortgage market – an outcome of problems experienced in the global financial markets. What exactly is the scenario prevailing in the property market? Here are some pointers:
- An acute credit crunch has considerably restricted and reduced the ability of building societies and banks since last autumn to lend money to customers.
- As a cascading effect, this has resulted in lenders shrinking the range and extent of mortgages on offer. They have been demanding much higher deposit amounts from harried borrowers, and simultaneously raising the interest rates on certain deals.
- The CML figures revealed that lending to first-time buyers fell to its lowest level in the three months to February since early 1975.
- The number of mortgages that were granted in February to various groups of home buyers was at its lowest level since 1992.
- Loans for purchasing a home, rather than for individuals merely expanding their mortgages to part-finance other spending or changing deals, now make up just 30 per cent of all mortgage lending; this is the lowest level on record.