UK Mortgages - Interest Rate Outlook
June 30th, 2009 |
The mortgage market in the UK has been through an extremely tough period with significant reductions in both the number of applications for funding, and also the level of approvals. This is down to a number of factors:
- Reduced funding available! - The credit crunch is still having an effect on the availability of wholesale funding.
- Reduction in house prices - People are reluctant to buy if the property may be reduced in the next few months. This is indicative of period of deflation which can be extremely dangerous from an economic perspective.
There have been some signs that the housing market is recovering in certain areas, certainly in the south of the UK there have been some small rises in the house prices. However, this is based on an extremely reduced market.
According to the Bank of England there were 43,201 mortgage approvals in the month of April which was the third consecutive increase and also the highest since April 2008! In addition there was a significant increase in the level of mortgage lending up from �640m in March to �973m in April. This is further proof that the market is preparing for significant movement in the coming months.
There are many consumers, myself included that have not moved due to the down-turn in the property market. This means that there are many families that are itching to move and once the market turns, it is likely there will be a period of boom which is likely to eventually wipe out any changes in the prices experienced.
Of course there will be some areas that do not recover as readily, and certainly there will be a price correction which is more permanent. Therefore this may not be good news for all.
If you are looking for a mortgage and you have a strong credit rating, it is certainly considered to be a good time to get one approved with the level of interest rates. General indications suggest that the interest rates may hold for another 6+ months, but once inflation kicks in they will be increasing rapidly. Therefore there is a school of thought that perhaps now is a good time to get a sensible rate locked in.
Please visit http://www.chesnutfinancequotes.com for quotations today.
