The latest Bank of England figures show that Banks and Building Societies cut lending by a net £2.425 billion between October and December, 2012. This includes lenders who are taking part in the funding for lending scheme. While I am noticing an increase in activity in mortgage lending, I know from speaking to a number of mortgage advisers that deals are taking longer to get through and that every box requires to be ticked before the lender will process the application – perhaps no bad thing!
Money Facts have recently called on lenders to re-open their books to first time buyers to get the property market moving. Sylvia Waycot, editor at Money Facts, said “we have seen the first time buyer market stagnate as deposit demands become unrealistic.” The latest significant changes the Government’s funding for lending scheme, which seems to put everything back on track – but only time will tell if this works out as planned. We are already seeing the forward thinking lenders into the markets with innovative products to help first time buyers to get onto the housing ladder. It looks as though we are about to enter yet another period of change within the mortgage market, and at last it might be for the better.
I hope the Government’s funding for lending scheme works as planned and the Chancellor takes the budget opportunity to do more to assist first time buyers.Lindsay Darroch Partner & Head of Property