Friday, 3 December 2010

NAEA issues warning to mortgage lenders | AboutProperty.co.uk

Mortgage lenders are issued stark warning

Friday, 3 December 2010 17:32

Houses

Mortgage lending trends 'could cause a backlog of property demand'. Image: Thinkstock

The National Association of Estate Agents (NEAE) has issued a stark warning, claiming the UK property market's fragile recovery is being placed in jeopardy by mortgage providers refusing to loosen their lending criteria.

NEAE chief executive Peter Bolton King said borrowers with existing mortgages will soon cease to benefit from low interest rates and any increase in the Bank of England's base rate will squeeze even those with large deposits out of the mortgage market.

This situation could lead to a "backlog of pent-up demand for property" emerging.

"That means the market will suffer from lack of demand in the short term and potentially be distorted by a rush of demand when these people can finally get onto the ladder," Mr Bolton King said.

Building society Nationwide warned earlier this week that house prices in the UK are likely to continue on a downward trend in the near future, although the drop is not expected to be as large as that seen in 2008.

Mr Bolton King said he did not expected to see widespread falls over the next year, but rather a "postcode power" where markets develop at different rates.
 

via aboutproperty.co.uk

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