Did you know that the demand for mortgages fell to its lowest level last month since Labour came to power way back in 1997?
The British Bankers' Association (BBA) said the number of approved mortgages for house purchases was down 46.2% in March from the same month in 2007.
Approvals dropped from 43,147 in February to 35,417 in March, the first time the total has fallen below 40,000 since the BBA started collecting data on the current basis in 1997.
It comes as no surprise as growing numbers of mortgage lenders respond to the ongoing credit crunch by axing different types of mortgage and cutting the funds available to those of us wishing to borrow.
All these figures emerged just 24 hours after mortgage lenders said they would work with the chancellor, Alistair Darling, to ensure as few homes as possible were repossessed during the credit crunch.
If you are worried about being repossessed, then Speak free of charge to a debt adviser who can provide you with advice and solutions to help you resolve your debt problems.
The Chancellor is urging mortgage lenders to fully pass on the benefits of lower Bank of England (BoE) interest rates to borrowers in the hope that a full-blown crash in house prices can be averted. Both Nationwide and the Halifax both announced sharp drops in house prices in March, although both are still reporting that property prices are higher than a year ago.
The BBA said its figures for mortgage approvals (money promised but not yet advanced to borrowers) pointed to further slack mortgage demand over the coming months. Even though the BoE has slashed interest rates in the last few months, the overall cost of mortgages continues to rise as banks have become less inclined to lend to one another to lend to one another.
All this has come amidst the BoE revealing that it would lend banks and building societies at least £50 billion in return for taking on their mortgage and credit card debts.
It is clear that a slump in house prices was inevitable after the boom of the past decade, which has seen the average price of a UK home almost treble (but most of you already knew that didn't you?)
While some are predicting that supply constraints will limit falls to about 5%, some economists are predicting a drop of 20% or more in the housing market. It has become increasingly difficult to obtain a mortgage in the past year owing to much stricter lending conditions and the removal of many mortgages (such as the 125% mortgage) from the market.
If the mortgage market improves (a big if), lending is not going to be offered on the very generous terms that we were seeing at the end of 2007.
As a result, minimum deposits of 10% are likely to become the norm for the foreseeable future (maybe even as much as 25%), along with higher rates of interest on fixed rate mortgages and tracker-rate mortgages.
So, it doesn't appear that the mortgage market is going to get any easier in the foreseeable future!
But don't worry, as there are still some competitive mortgage deals out there, especially if you use an impartial adviser who can search all mortgage lenders, some you may never have heard of, to find the best deal for your situation.
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