Mortgage availability set to rise



Mortgage

Mortgage

Mortgage availability is set to hit a two year high as lenders have reacted to market share targets and the improving costs and availability of funds.

Lenders can influence mortgage availability based on their willingness to lend money, and the risk they feel is associated with each customer, as well as the availability of funds to lend their customers.

The central bank’s three monthly survey found that lenders were starting to lend with a smaller deposit, something they’ve been unwilling to do for the last two years.

With the average house price increasing 0.5% for the second month on the trot, Nationwide building society painted a positive picture.

The bank warned that an “unexpected” jump in mortgage defaults could be the first sign that interest rate rises could be having an adverse affect on the market.

The survey also revealed that lenders thought there was a decrease in demand for loans in the last year, and that they thought house prices would continue to fall in the next three months.

“The unexpected increase in default rates on secured lending in the first quarter may temper their enthusiasm for lending more,” said Vicky Redwood from Capital Economics. “And even if they are willing to lend more, the survey showed households’ demand for secured lending for house purchases fell sharply again.”

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