Home Buyers are Facing Stricter Mortgage Checks
There has been a lot of recent news about how the property market has become stagnant since the beginning of the year. Prices haven’t particularly fallen but at the same time we haven’t experienced the same type of growth within the market that we have seen since the recession ended a couple of years ago.
The main indicator that analysts look out for when identifying a slower moving market are the mortgage lending figures. When looking at these figures it appears that less money was loaned to house buyers during the last quarter of 2014 and since then we have experienced an even further decrease of 16% during the first quarter of this year. In recent weeks analysts have speculated that the uncertainty of election results with a possible hung parliament or even a change in government has caused both buyer and seller uncertainty. However, recent news that mortgage lenders are asking a far wider variety of questions, which mainly probe into a borrowers personal life have sent some jitters among buyers and a lack of prospective buyers may result in sellers having to lower the price of their house in order to achieve a sale. Questions such as how large your family is and how much you spend on your weekly shopping are now being asked.
Is it because Mortgages are Tougher to Get
When looking into the reason why less mortgages are being issued, many people believe that new stricter lending criteria has made it more difficult for home buyers to actually attain a mortgage and in turn home sellers are unable to sell their house quickly. In particular first time buyers are finding it particularly tough, with 14% less mortgages being issued to first time buyers, when compared to the same first quarter time period during 2014.
London Actually Hit Hardest
Surprisingly, London which as been the number one property hotspot has recently been hit the hardest and slowed down the most. Mortgage lending figures for the first quarter of this year show a fall of 17% less house buyers when compared to the 4th quarter of last year, many believe that this has happened due to the uncertainty of a new Labour government coming into power and their proposal of a mansion tax which of course would have affected many million pound homes within London. Also, admittedly the London Property Market may have become too over heated and what rises quickly can also be more volatile and fall quickly.
Market Predicted to Move Quicker since the Election Results
Since the Conservatives have now come into power the fear of the unknown has been removed from prospective house buyers and hence the slowdown due to the election that we recently experienced as already proven to take a quick U turn. We need to appreciate that the recent 1st quarter figures are a acknowledgement of what has happened in the past and not necessarily any indication of what may continue to happen. According to City AM we have already seen a sharp increase in activity since the positive general election result that we received, whereby there is no hung parliament and no change in political party.