It’s been over five years since the run on Northern Rock ushered in the credit crunch. Since then, access to large mortgages and finance has been tough. Banks have tightened lending criteria, the choice of mortgage deals has shrunk and some mortgage lenders have disappeared completely.
Now, though, we are witnessing many mortgage market changes. As The Independent reports, ‘evidence does finally seem to be gathering that the credit taps are being slowly turned on.’ Here, we look at the facts which show that the high value mortgage market is, at last, set to improve.
Private banks and building societies plugging some of the lending gap
Over recent years, retail banks have been increasingly reluctant to lend to anyone other than clients with a large deposit and an impeccable credit history. This means that brokers have been forced to look elsewhere for institutions with an appetite to lend.
Islay Robinson, director of London mortgage broker Enness Private Clients, said: “Over the last five years we have built up strong relationships with a wide range of non-traditional lenders. For example, many private banks in the UK and overseas are happy to agree mortgage terms for high net worth clients. So, if you’re looking for a large mortgage, using a mortgage broker can be a great way of increasing your choice of lenders.”
As well as private banks, mutual lenders have also seen their market share rise. Data from the Building Societies Association (BSA) shows that in the first seven months of 2012 lending by mutuals increased by 39 per cent compared to the same period last year. And, the number of mortgages at loan to value (LTV) ratios of 85 per cent or above rose by 27 per cent in the same period.
Paul Broadhead, head of mortgage policy at the BSA, said: “I am encouraged by some of the signs we are now seeing on mortgage availability. Building societies and other mutuals have been consistently lending more each month this year.
“There is mortgage supply out there — even at higher loan to value ratios — and it may now be time to stimulate a little more demand.”
Choice of mortgage deals is also up
The number of residential mortgages available has also risen sharply over the last two years. According to data analyst Moneyfacts, there are 3013 residential mortgage deals available today, up from 2471 two years ago.
Mr Robinson, the London mortgage advisor, added: “It’s clear from the mortgage market changes that lenders are keener to agree deals than they were two years ago. It’s still far from east to get a large mortgage, but at least the market is more stable and lenders are at least interested in doing business.
“And, as Paul Broadhead at the BSA correctly identifies, one of the main concerns is that many people keen to buy property are not proceeding because they wrongly think they won’t get a mortgage. I’d urge anyone looking to buy a new home to speak to a mortgage broker – particularly if your personal circumstances are unusual or complex – for advice. You may be surprised at the range of large mortgage options available to you.”