Lenders shut doors on homebuyers
A recent report has indicated that many lenders have now shut their doors on a large number of homebuyers, with many banks and building societies leaving homebuyers out in the cold.
The report claims that whilst a small number of buyers are enjoying the benefits of being able to get extremely low interest rates and a choice of competitive mortgages from a range of lenders, many others are struggling to find any mortgage that offers affordability.
Many lenders are now only offering affordable mortgage deals to those that have huge deposits to put down, and those with little or no deposit, which includes many first time buyers and low income families, are unable to find a mortgage at all. With the base rate in the UK now at its lowest level in history borrowers should be enjoying historically low rates, but this only applies to those that are able to put down a deposit of at least 40 percent of the property value in some cases.
Since the onset of the global credit crunch the number of mortgage products available on the market has shrunk enormously, and lenders have brought in far tighter lending criteria, which has resulted in a number of groups being unable to get a mortgage. This includes the self employed, those with damaged credit ratings, first time buyers, and those on lower incomes and low equity levels in their existing properties.
The lack of mortgages for groups such as first time buyers has exacerbated the housing slump, and this is because whilst house prices have been falling making properties more affordable for first time buyers the lack of mortgage availability means that many still cannot get a property despite the lower property prices.
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