The Last Thing The Volatile Housing Market Needs Is A Shrinking Pool Of Mortgage Availibility by Timothy Frodsham

The recovery of the UK economy has been a worry for many, with slow growth on house prices and a sluggish increase in mortgage lending. Statistics released by the Bank of England suggest that the rate of recovery and growth is losing speed rapidly since the financial crisis.

Net lending that was lent out against the value of homes rose only marginally, which is in stark contrast to the January to February figures, which witnessed a significant rise.

Financial Analysts Global Insight have revealed that the latest figures are down on quarterly trends and that first quarter approvals are in excess of 10,000 down in comparison to the fourth quarter of last year. Even worse, they are almost 50% below the level considered indicative of a stable housing market.

One industry insider has claimed that the significant boost in house sales and in lending, that took place in the last quarter of the previous year, might have indicated an early boom in the housing market, owing to a higher number of first time buyers than usual looking to enter the market and get a foot on the property ladder.

Whilst lower than expected numbers of mortgage and remortgage approvals are adversely affecting the industry, it may not be such a bad thing for buyers looking to enter the housing market.

Another economist has offered comments on the fact that property prices and mortgage lending would be unable to increase quickly while other sectors remain slow and steady, as this may cause another crash to occur. With unemployment levels still very high, and the total debt in the UK still being very high, it is impossible for one sector to recover without having a knock on effect on other areas.

In spite of all of this, many are also reiterating that although markets are slow, and growth is sluggish, there are still some extremely good remortgage deals to be had today, with many lenders still offering competitive rates to those in good financial stead.

Household finances are under a lot of pressure, said Mr Parnell, adding “and as a result demand for house purchase loans fell in the first three months of 2011.”

The Council of Mortgage Lenders have said that it is clear that we will see increases in property values, mortgage lending and unsecured debts over the next 12 months or so, which is promising as this will all aid the recovery of the UK financial markets, and homebuyers or those looking to remortgage will have the opportunities they have been seeking.

He also stressed that the demand for remortgage deals remains firm, potentially linked to a widespread expectation of high base rates. He also indicated that the level of approvals in the first quarter showed some of the highest figures, particularly in February, in the past 24 months. He added that remortgages are set to be a strong part of the market in the foreseeable future.

Timothy Frodsham writes for JustRemortgages.com one of the UK’s top sites for the latest remortgage rates and best remortgage deals.

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