Despite Alistair Darling's instructions, and the UK governments refinancing of major banks, mortgages are relatively hard to get. This does nothing to restore confidence in the housing market, and house prices continue to drop.
Prospective buyers are finding it hard to obtain mortgages compared to the situation prevailing only a few short months ago. There are various schemes afoot to assist would be house buyers, but it may be that many entering the market for the first time, are waiting to see how far prices will fall before they commit. There are still favourable schemes available, including the advance of 95% of a property's value, and a multiple of four times joint earnings, but the market remains sluggish.
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The UK government has stated, that they don't intend to directly manage the banks they have assisted, with billions of pounds of taxpayer's money. However, it is difficult to see how that squares with conditions they imposed when agreeing to the massive bailouts. It seems that there will be government representation at boardroom level, so presumably the banks are expected to ease borrowing restrictions to house buyers, and small businesses.
Many sellers are reluctant to admit that the value of their property has fallen. They are unrealistically asking what the value was before the credit crunch, or simply waiting until the situation improves. So the hesitancy of lenders to deal with anybody other than rock solid borrowers, coupled with sellers and buyers intentions continues to depress the mortgage market.
Although it is tough for many people to get the mortgage they want or could have secured a short time ago, the situation is by no means impossible. For those whose requirement is to obtain a mortgage now, the best advice is to shop around. Different mortgage lenders have different plans, and they might well find something to meet specific requirements. House builders are also feeling the pinch, and they are offering various schemes, including help with deposits, and even agreements to make up any difference should the price of their new builds diminish in the shorter term.
The domestic housing market is exactly that, and not the way to instant riches, as it may have previously appeared to be. However, it plays a major part in the UK economy, and it may pay first time buyers in particular to find out what incentives, if any, the government is offering that may assist them in buying a home of their own.
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mortgage market remains tight
mortgage market remains tight
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