Mortgages At All Time Low Despite Drop in House Prices

Mortgage approvals were at an all time low last month, another indication of the current dip in the housing market.

The Bank of England reported yet another downward turn for the housing market after mortgage approvals fell to 36,000 last month, compared to May’s 41,000 approved mortgages. This has been put down to tightening in lending as a direct result of the credit crunch that we are feeling.

Mortgage approvals are predicted to fall further too, which is said to be consistent with house prices falling and the credit crunch tightening for all banks and lenders.

After several years of double digit growth, house prices have started to fall rapidly, which has forced banks to rethinking their lending and ask for larger deposits before agreeing to new loans.

According to analysists, house prices have fallen 8% from when they peaked last Summer and they are forecasting another 30% drop, which we should see by the end of 2009. This is more than likely as the Bank of England are unlikely to cut rates any time soon and inflation is so high.

People are predicting worse things to come, before they get better, but are saying that if you are in a position to buy, then now is the time. It is a buyers market and although you are going to need a deposit of around 10% or more, you could really get yourself a bargain.

For many first time buyers, the fact that house prices are falling coupled with the new Open Market HomeBuy schemes, mean that they are finally being cut some slack and are going to be able to get onto the property ladder.

If you are interested in finding out more about Open Market HomeBuy schemes, then get in touch with us at Click n go Mortgages and see how we can help you to get a foothold on the elusive ladder.