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Banks expect “significant increase” in availability of mortgages

Alex Johnson

glasgow1 300x166 Banks expect significant increase in availability of mortgagesBanks expect a “significant increase” in the availability of mortgages in the first three months of 2014, according to a Bank of England survey which also indicates that demand for mortgages is rising faster than at any time since 2007.

Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said: “Lending conditions were particularly favourable for mortgage hunters in the last three months of 2013. Pricing became increasingly competitive and mortgage access visibly improved, encouraging more hope among firsttime buyers with small deposits looking to get on the property ladder.

“The Bank of England report shows increased availability and willingness among lenders to lend at loan-to-value (LTV) ratios above 90%. This has undoubtedly been fuelled by Help to Buy, which has normalised 95% mortgages again and created renewed competition among lenders. As a result, there was an influx of affordable products for consumers with low deposits, as even those lenders not participating in the scheme launched their own 95% mortgages.”

Jonathan Harris, director of mortgage broker Anderson Harris, added: “More lending is being done at higher loan-to-values which is great news for those with modest deposits who may otherwise have struggled to get a mortgage. However, while this will help get the housing market moving with more transactions lower down the ladder, it’s important that borrowers do not overstretch themselves. Lenders may be relaxing credit scoring criteria but just because you can get a mortgage doesn’t mean you necessarily should.”

No house bubble in Glasgow and west of Scotland
House prices in Glasgow and the west of Scotland were up by £2,000 in the last three months of 2013, although average selling prices are a little over 2% lower than they were a year ago, according to the Glasgow Solicitors Property Centre. Selling times fell to mid-2008 levels with the average number of days dropping by nearly a third, down from 131 days at the start of 2013 to 91 at the end of the year.

At the start of 2012 GSPC recorded an average selling price of £121,000 – the current figure is £119,000. Pictured above is a Zoopla Heat Map of prices in and around the Glasgow area.

GSPC Chief Executive, Mark Hordern, said: “Despite almost universal talk of a house price bubble, prices in the west of Scotland have remained largely unchanged for the last two years. The slight increase in prices this winter was welcome in as far as it suggests that prices may be stablising, but prices remain below where they were this time last year and there is no clear evidence of a strong recovery in prices yet.

“The recovery will, however, be patchy. Some areas are already experiencing the return of closing dates while others remain in the doldrums. Some types of properties, especially affordable three bedroom family homes, are selling faster and more easily than others – notably larger four or five bedroom homes.”

Homelessness in Wales
A survey for the Chartered Institute of Housing Cymru shows that 97% of housing professionals expect family homelessness in Wales to rise this year. Keith Edwards, CIH Cymru Director said: “UK policies like the bedroom tax, the benefit cap and rental payments going direct to tenants rather than landlords, will put increasing strain on those struggling to manage their finances and pay their rents.”

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