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Mortgage availability likely to fall

Mortgage availability likely to fall

Category: Mortgages

Updated: 02/07/2010
First Published: 02/07/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The availability of mortgages could well be squeezed in the next three months, lenders have warned.

The Bank of England's credit conditions survey revealed that lenders reported a rise in mortgage availability from April to June, although demand actually fell slightly.

The increase in availability continues a trend that has been in evidence since the market troughed in April 2009.

However, it is thought that a tightening of credit conditions could rear its ugly head once more, at a time when any recovery in the housing market is still very much in the balance.

Surprisingly, the Bank's figures revealed that the number of people wanting to remortgage rose for the first time since 2008.

Homeowners have been reluctant to take out new deals in recent times, preferring to stay on the lenders' standard variable rates, which, in many cases, offer lower rates than existing deals.

Lenders have reacted to this by cutting rates, with the cost of two year fixed rate mortgages currently at a seven year low, recent research by Moneyfacts.co.uk found.

The number of mortgage customers that fell into default over the second quarter of the year fell slightly, a development the Bank admitted was unexpected.

The default rate is expected to remain steady in the current quarter.

Of record low rates are enough to tempt you to the market, amongst the best two mortgages currently available are a deal from The Co-operative Bank at a rate of 2.95% and a deal from HSBC at 2.99%.

Yorkshire BS also offers a two year fixed rate mortgage deal at 3.05%.

Amongst the best variable rate mortgages on the market is HSBC's 2.39% tracker, while ING Direct offers a rate of 2.84% for the term.

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