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House Lenders Reduce their Property debt

Sell your home Monopoly

Banks have reduced the amount of debt they hold in UK property

Not good news for both UK home sellers and buyers, the lenders appear to have turned around and are decreasing their lending rather than expanding. Not only that, they have already reduced the amount of mortgage debt that they hold from £228 bn to £212 bn  in the space of a year.

This coincides with the UK governments position to consolidate rather than grow. Other countries such as the United States are actively encouraging their lenders to issue mortgages and this forward thinking method of growth has already allowed the US to exit their recession. On the opposite end of the scale our government have restricted growth and it just so happens that a few weeks ago we entered a double dip recession.

I can’t sell my home, is this why?

To state the obvious, yes, this is largely why. Traditionally the old British approach was to move forth and conquer, strive and succeed and build an empire. Not any more, we have now gone into retreat and appear to be like a rabbit startled in headlights.

With a lack of lending the market will remain stagnant, if nothing changes sellers will still be unable to sell their home. Normal buyers are unable to buy property and there is now only one side of the market that is surging forward. A recent report by Nationwide shows that the number of new landlords has increased over the past year and forecasts show that this side of the market should continue to grow. It’s no surprise to see that this is because Buy to Let lenders have actually loosened their criteria when compared to residential mortgages being harder than ever to attain.

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Europe is also holding the UK house market back

Many people are speculating that our position of consolidation is because we are anticipating further major problems in Europe. What many people think is that the government are waiting for this European bubble to burst, the air to clear and then we may be in a position where we can speculate on Growth. The mere fact that we are closely associated with Europe is a major set back and unfortunately normal citizens who wish to sell their home quickly are continuing to struggle.

European prices continue to fall

If I were to ask you to guess the country’s where property prices have fallen the most over the past year you would probably be right. The three country’s that have suffered the most are Spain Portugal and Ireland. many have turned a blind eye to the situation in Ireland but surprisingly the average house price has fallen around 15% over the past year and this is almost twice as much as Spain and Cyprus. It’s interesting that Ireland’s dire situation isn’t reported on the news but they are facing some major restrictions from the banks and for any property buyer is almost impossible to attain a loan.

Obviously stability is a better position than going backwards but what ever happened to that old spirit of prosperity and growth that we once had. If you are looking to emigrate or just simply require a quick house sale, speak to one of our advisor’s as we are happy to help the best we can.

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