the Business Forum and
the Economic Partnership
in Brighton & Hove
Homepage    BCRP Intranet    Funding    Events    Knowledgebase    Links    About us     Contact us
Key projects
Crime
reduction
 


Inward
investment
information
 


Licensee
Forum
 

Workforce development 

Transport
 

Business &
climate
change

Property &
Development sites

Business
Improvement
Districts

Housing
 

Strategy
 

Consultation opportunities
 

Brighton & Hove Business Forum
8-11 Pavilion Buildings, Brighton, BN1 1EE
Tel: 01273 735442
Email: info@brighton
business.co.uk

© Brighton & Hove
Business Forum

News - 3 April 2008

Mortgages get harder to find

The Bank of England has warned that the squeeze on the availability of mortgages is expected to continue and get worse in the next three months.

It also predicted that demand for home loans was likely to fall slightly during the same period as people held off buying decisions due to the uncertain nature of the economy.

The Bank of England’s Credit Conditions Survey said lenders expected a rise in the rate of homeowners defaulting on their loans as the costs of mortgages rises but availability declined.

Lenders are also expected to cut the amount of other loans in the next three months, not just mortgages but also credit cards and overdrafts.

The survey asked lenders about their predictions for mortgage availability over the next quarter. A balance of plus 43% thought that increasingly limited availability would get worse as the appetite for risk diminshes.

On Wednesday, First Direct, the Co-operative and Lehman Brothers' Southern Pacific and Preferred Mortgages all announced they were suspending some mortgage offers and 100% mortgages are now almost extinct and even 95% mortgages getting increasingly hard to find..

According to financial information service Moneyfacts, the number of mortgage products on offer has fallen by 20% over the past week.

There are now just 4,270 different mortgage deals available compared to 15,599 in July 2007 and over 7,000 only last month. This means that 1,4 million people having to re-mortgage their homes, due to fixed interest deals coming to the end of their terms in 2008, will need to shop around more for a deal. And first time buyers face having to find a much bigger deposit than would have been the case before the squeeze began.

With the Land Registry putting the average cost of a home in England and Wales at £185,616, buyers could need a 15% deposit of £27,842 for a typical home.

ECONOMIC PARTNERSHIP COMMENT

Sadly for people coming to the end of a cheap rate fixed mortgage (somewhere between 1.5 and 2 million people this year) this situation is likely to get worse. Because mortgage lenders are unable to borrow they have less money to lend themselves so they increase their rates and tighten their conditions to price people out of the market.

When one lender does this, borrowers try their luck with another lender, which similarly has to increase its rates to push away the business. This means the first lender looks competitive again and so has to make a further rate increase.

The situation will not change until we reach the bottom of the exposure to sub-prime lending losses and there is a clear picture of just how much banks have lost. With the admission this week from Swiss bank UBS that its losses at $18bn are twice the previously declared figure, that time does not look close.


Read related items on:
National
Market movements
Bank of England


Browse our business Knowledgebase or search by keyword


Headlines

15 December 2017
Brighton is among the best places to start a business due to their strong growth factors
15 December 2017
GTR consultation ends 20th Dec 2017 13 December 2017
Ethical Food StartUp Programme - Idea Generation Workshop 12 December 2017
Utilise Plus launch programme of energy efficiency grants and business support for SMEs 11 December 2017
City Centre Vacancy Rates Drop Slightly From Sept 5 December 2017
Innovate UK Announces Sector Competitions in Manufacturing and Infrastructure Systems 5 December 2017
GDPR, steps to early compliance 1 December 2017
The 29th Sussex Business Awards 2017 Winners Announced 1 December 2017
Old tech gear? Give IT a new lease of life 29 November 2017
Driving for Better Business Campaign launches 29 November 2017
ARKA Funerals sponsor Burning the Clocks 2017 with 'In Memory' lanterns 27 November 2017
Govia Thameslink launches third consultation phase on once-in-a-generation timetable restructure 23 November 2017
Coast to Capital Launches Brighton Mainline Alliance 22 November 2017
Calling all UK companies that have transport, parking and commuting issues to address 15 November 2017
Start-up Challenge Business Competition Offering £10,000 Investment to Young Entrepreneurs 15 November 2017
IUK Announces £10 Million Innovation Loans Infrastructure Systems Funding Competition for UK SMEs 15 November 2017
Sussex Food and Drink Grand Finalists Celebrate Success 10 November 2017
Meaning conference confirms speaker line-up: breeding a new army of business activists 10 November 2017
Positive body image documentary screening at Hove school 8 November 2017
Material Practices: Painting and Printmaking at the University of Brighton - Private View 8 November 2017
Economic Partnership kick starts city strategy consultation 8 November 2017
GTR respond to positive ASLEF referendum result 7 November 2017
350th employer signed up to the Brighton & Hove Campaign 7 November 2017
Rampion announces £4 million community fund 6 November 2017
The First Gamification Conference comes to Brighton 3 November 2017
Shoreham Port Welcomes New Commercial and Operations Director 2 November 2017
Burning the Clocks launches Crowdfunder for 2017 2 November 2017
The Gatwick Diamond Business Awards are now open for Entries 31 October 2017
Brighton Based Paxton Open New Centre for Technology & Innovation 27 October 2017
Adventures in risk taking for high growth businesses 27 October 2017
Can your business benefit from offering a 'world of work' experience? 27 October 2017
The Small Business Saturday Bus Tour launches across the UK for its fifth year 24 October 2017
Business Networking & Case Study Visit with the Sustainable Business Partnership 24 October 2017
Could you use an Energy Saving Workshop? 17 October 2017
Peter Blake raffle raises £2,290 for Middle Street School 17 October 2017
AMEX named major sponsor of city's bike share scheme 16 October 2017
Ropetackle Business Friends scheme 4 October 2017
VIRGIN STARTUP MEETUP 'HOW TO TELL (SELL) YOUR STORY' 3 October 2017
BTN BikeShare: a successful first month 3 October 2017
PLATF9RM open at Hove Town Hall