For the last few years, high property prices, low mortgage availability and a contracting economy have all slowed the UK property market right down.
One of the major factors in this slowdown has been the reluctance of mortgage providers to lend the money that many potential homeowners need to get on the ladder.
Though the lending figures for the past 12 months make depressing reading, there is cause for some hope. During October of this year, mortgage lending rose to £12.9 billion. That’s 4% higher than last October. Though this may not seem like a huge rise, it does represent a significant increase in lending.
The reason for this increase in lending has been widely attributed to the ‘funding for lending’ scheme which was introduced by The Bank of England at the start of August. This £80 billion pot has enabled mortgage lenders to offer far more attractive mortgage deals to potential home buyers and has clearly injected some much needed momentum into the property market.
One criticism of the scheme is that it seems to have prompted the majority of mortgage lenders to offer deals which are only available to those with high deposits.
Unfortunately, this makes the offers inaccessible to many first time buyers.
It is clear from these figures that things are certainly picking up in the property market. Greater mortgage availability and falling house prices (in many areas) means that properties will inevitably start to move. What’s also clear is that more needs to be done to regulate the type of mortgage deals that mortgage lenders are offering as part of the funding for lending scheme so that first time buyers can consider making that important first step onto the property ladder.