Demand for mortgages slump through the last quarter
“Anxiety about the health of the housing market resurfaced today after it emerged that demand for mortgages slump ‘markedly' in the last three months of 2010 – and is expected to fall again in the early part of 2011.
The impact of the spending cuts in the government's comprehensive spending review and a fall in house prices was blamed for the drop-off in demand for home loans in the Bank of England's quarterly analysis of credit conditions for households and businesses.'
‘[The] fall was largely accounted for by prime lending which lenders commented reflected a recent fall in house prices, a general weakening of sentiment towards the housing market and uncertainty over the economic outlook associated with the impact of the government's comprehensive spending review,' it said.
Property investors have been expecting this for some time. The property market is simply stabilising over Sept 2010 to April 2011, this means that prices may drop (not more than say 5% more) this will bring them to what I believe is realistic. Market sentiment has to settle down and it will. The media is playing us all for fouls about the government spending and austerity measures, this will play out until at least May. Finally, Lenders need to pay back the Special Liquidity Scheme borrowings, they have made a good start and we are seeing competition starting to show its head.
Regardless, it doesn't matter, our clients have been getting mortgages approved without too much problem on demand for mortgages slump. If you are a good credit risk and have money for deposits you are able to buy property almost free from competition.
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