Home loan market deflated, although recovery is possible
The latter part of 2007, stood witness a substantial 1/5th of a reduction in the number of home loan applications approved by the entirety of the UK’s lending population.
According to recent statistics by the council of mortgage lenders, approximately 60,000 home loan arrangements were agreed during December 07, compared to almost 80,000 agreements completed in November 07.
The council suggests that tightening economic conditions are the primary reason for the decline, as apparently, demand is still quite strong within the home loan sector. The biggest problem, quite simply, is that borrowers cannot afford to meet the repayment terms of their proposed plans, and home loan providers are becoming more and more cautious with regards to granting the average borrowers request.
However, the institution also suggests that although the prospect of mass home repossessions still looms on the horizon, there is still a light at the end of the tunnel. In order to ease the financial constraints currently being faced by Brits up and down the country; the BOE is expected to continue to reduce the national rate of interest over the coming months. All being well, and dependant upon the level of predicted reductions ahead, the home loan market and borrowers in general, stand a good chance of recovery come Q3 2008.
