According to recent reports the UK has a slow year ahead of it when it comes to the mortgage and property markets, as challenges and difficulties in these sectors are still rife. Whilst there has been talk of recovery for both the mortgage and property sector following the global financial crisis and the recession there are still many hurdles to overcome, and it is unlikely that there will be much improvement over the coming year.

When it comes to property prices many industry experts are expecting property values to drop again this year, with supply outstripping demand in what has become a very difficult and turbulent climate. The mortgage market will also remain subdued, with factors such as job losses, low consumer confidence, and lack of deposits fuelling a lower level of mortgage applications and approvals.

The Spending Review from the coalition government has resulted in a hundreds of thousands of expected job losses, and this will make both consumers and lenders err on the side of caution. Consumers will be too worried about their job security to apply for mortgage finance, and lenders will be very cautious about who they lend to given the climate.

First time buyers are also still struggling to raise the deposit levels that lenders are demanding, which will also affect the number of mortgage applications and approvals, and will mean that once again the buoyancy is stripped from the property market, further driving down prices.

One industry official said: “Although there may have been recovery in the property and mortgage markets since the worst of the credit crisis and recession there is still a very long way to go. The expected job cuts from the Spending Review will do nothing to help these sectors, as it means that both potential borrowers and lenders will be on their guard.”