Last week saw the Bank of England release the results of its new Credit Conditions Survey of banks and building societies. Interestingly, the publication had a number of interesting findings with regards to the mortgage market here in the UK.
Mortgage supply squeezed
Indeed, according to the BBC, evidence from lenders in the survey showed that the number of mortgages made available in the UK fell in the third quarter of the year, which is representative of the first drop in over two years. These findings have been supported by indications from other sources that the housing market began to slow down over the summer months.
For example, the past few weeks have seen a number of reports emerge highlighting evidence of a decline in the number of inquiries from potential new buyers, and houses are remaining on the market for longer before being sold. Furthermore, as reported in The Telegraph back in September, new data compiled by Nationwide showed that house prices fell in September for the first time in almost a year and a half.
According to The Guardian, the survey also suggested that lenders’ concerns regarding house prices had been a pivotal factor in driving their increasing reluctance to offer secured loans. Another key factor thought to have prompted the squeeze, is the introduction earlier this year of the new affordability rules from the Financial Conduct Authority (FCA). These came into effect on the 26th of April this year and saw lenders adopt stricter rules, such as carrying out more detailed checks and only offering mortgages to people with a concrete and realistic repayment plan, in an attempt to help stop irresponsible lending.
However, the news was not all doom and gloom and the survey also reported some indications that changes may be on the way, signifying that the downward trend in mortgage lending may have in fact only been temporary. Indeed, as outlined in the published report, lenders expect mortgage availability to increase in the fourth quarter, in line with increasing demand, suggesting that the appetite for mortgages is set to pick up again. Significantly, recent weeks have also witnessed a flurry of activity as lenders compete for their market share, offering a number of different incentives including price cuts and even iPads in an attempt to attract customers.
These recent reports highlight the often volatile nature of the mortgage market which can be a pretty confusing place at times. However if you’re looking for a mortgage broker in Birmingham, then here at Search Mortgage Solutions, our Birmingham-based expert mortgage advisors can help you find the most appropriate mortgage for your individual needs and requirements. For more information about our services please don’t hesitate to contact us and a member of our knowledgeable team will be happy to help you with your enquiries.