The Colour of Money

At its monthly meeting to review interest rates, the Bank of England’s Monetary Policy Committee (MPC) opted to keep the base rate unchanged at 5%.

This is not the kind of news which is going to do much for the mortgage industry or the UK housing market.

As I talked about in a post earlier this week, there are already far fewer mortgages available now than there were a year or so ago. According to an article I read this week, there were over 15,599 different mortgages available this time last year. Now the number of different mortgage products has fallen to 4,679.

More and more mortgage borrowers are now realising the vital role that a professional mortgage advisor can play in helping them find and secure a suitable mortgage. With deals changing all the time and lending criteria shifting almost daily, a mortgage broker who knows where to go for a decent mortgage can be worth his weight in gold.

Sites such as this mortgage website are worth checking out if you want to get access to a qualified mortgage specialist with access to a range of mortgage deals.

The Woolwich (owned by Barclays Bank) is the latest lender to tighten up its mortgage lending criteria and is now insisting on a minimum mortgage deposit of 10% from all new borrowers. Prior to this, Woolwich had three mortgages which were available for up to 95% of the property value (i.e. with only a 5% deposit). These were a five year fixed rate mortgage, a lifetime tracker mortgage, and the bank’s standard variable rate mortgage.

The Nationwide applied a similar 10% deposit restriction to all but two of its mortgages last week, echoing steps already taken by Britannia, Co-op, Alliance & Leicester, and Cheltenham & Gloucester.

Whilst all this is going on, house prices carrying on falling. For the sixth month in a row, property prices fell in April - this time by over 1%. The average UK home is now worth £178,555, which is a drop of £1,759 since April last year.

Just as well, some would say, given that more and more mortgage borrowers are going to need to stump up 10% or even 15% of the value of the house as a deposit……