The Mortgage Crisis

<h1>The Mortgage Crisis</h1>Author: <a title="Linsey Summers" href="http://www.articlesbase.com/authors/linsey-summers/58243.htm">Linsey Summers</a> Large banks in Britain such as HSBC, Barclays and Nat West approved less mortgages in May since the same time in 1997. The cause of this is reluctant buyers, high asking prices and increasing household outgoings. The British Bankers Association said that banks approved 27,986 mortgages in May which was down from the 34,752 in April. This is a 56.1% decline from this time last year. This decrease represents the state of the British housing market and the current economic climate. The Halifax, one of the countries biggest lenders has predicted a 45% drop in house sales this year. Britain’s banks are finding it more and more very difficult to raise funds on the financial markets for mortgages. Due to this banks are more reluctant to lend money so their lending criteria are much tighter. Deposits have risen to between 10 and 20%. It has been predicted that it will take home buyers an average of four years to save up enough money for a deposit, a long amount of time that some cannot afford to wait. After the Northern Rock debacle banks are understandably cautious but this means the housing market is suffering the consequences. The Bank of England has increased inflation rates and these small changes will have an impact on the economy. The rising interest rates will put a stop to the housing boom we have been experiencing for the last few years. Banks and other lenders are continuing to hope for the Bank of England to make inter bank lending much easier. This would enable banks to access wholesale funds, therefore allowing them to approve more mortgages for the suffering home buyers. Due to this crisis in the market, leasing has become far more popular. In fact there was a 41% increase in the commencement of tenancies in May from the same time in 2007, coinciding with the decrease in mortgage approvals. Those who were considering selling up and buying new properties are putting their sale on hold due to the pinch on their finances. It seems as though the trend will continue to climb if the state of the housing market continues down the path it is on. With the rental market so buoyant, buy-to-let mortgages are on the up. Those who are able to get a mortgage approved are buying properties to rent out to those who cannot afford to move themselves. These opportunities are been taken up by professional landlords with an existing property portfolio.About the Author: Linsey is an author of several articles pertaining to <a href="http://www.onlyfinance.com/Mortgages/" title="Mortgages">Mortgages</a>. She is known for her expertise on the subject and on other Business and Finance related articles. Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/mortgage-articles/the-mortgage-crisis-473286.html" title="The Mortgage Crisis">The Mortgage Crisis</a>

Large banks in Britain such as HSBC, Barclays and Nat West approved less mortgages in May since the same time in 1997. The cause of this is reluctant buyers, high asking prices and increasing household outgoings. The British Bankers Association said that banks approved 27,986 mortgages in May which was down from the 34,752 in April. This is a 56.1% decline from this time last year. This decrease represents the state of the British housing market and the current economic climate.

The Halifax, one of the countries biggest lenders has predicted a 45% drop in house sales this year. Britain’s banks are finding it more and more very difficult to raise funds on the financial markets for mortgages.

Due to this banks are more reluctant to lend money so their lending criteria are much tighter. Deposits have risen to between 10 and 20%. It has been predicted that it will take home buyers an average of four years to save up enough money for a deposit, a long amount of time that some cannot afford to wait.

After the Northern Rock debacle banks are understandably cautious but this means the housing market is suffering the consequences. The Bank of England has increased inflation rates and these small changes will have an impact on the economy. The rising interest rates will put a stop to the housing boom we have been experiencing for the last few years. Banks and other lenders are continuing to hope for the Bank of England to make inter bank lending much easier. This would enable banks to access wholesale funds, therefore allowing them to approve more mortgages for the suffering home buyers.

Due to this crisis in the market, leasing has become far more popular. In fact there was a 41% increase in the commencement of tenancies in May from the same time in 2007, coinciding with the decrease in mortgage approvals. Those who were considering selling up and buying new properties are putting their sale on hold due to the pinch on their finances. It seems as though the trend will continue to climb if the state of the housing market continues down the path it is on.

With the rental market so buoyant, buy-to-let mortgages are on the up. Those who are able to get a mortgage approved are buying properties to rent out to those who cannot afford to move themselves. These opportunities are been taken up by professional landlords with an existing property portfolio.

Linsey is an author of several articles pertaining to Mortgages. She is known for her expertise on the subject and on other Business and Finance related articles.

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Article Tags: Mortgage, Banks, Crisis

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