Secured loans 'remain difficult to obtain'

Category: Loans
Date: 11/14/2008 2:51:13 PM

An expert has suggested that obstacles remain in obtaining secured loans.

Despite recent interest rate cuts by the Bank of England, content editor at FindaProperty.com Michael O'Flynn stated that mortgage providers are still nervous about lending.

He explained that a base rate of three per cent would usually "create a bit of a feeding frenzy", but a surge in sales is not expected.

This is because lenders continue to ask for large deposits in return for a competitive deal - meaning low rates, falling prices and the increase in stamp duty threshold do not have the desired effect on those entering the market.

"It's a painful irony for many first-time buyers that just at the moment when asking prices have come down finance has become much more difficult to get hold of," said Mr O'Flynn.

House prices have fallen by 7.3 per cent over the last year, a study by Hometrack recently found.