What is happening to the UK mortgage market?
Despite the appearance of a number of new mortgage arrangements over the last few weeks it appears that the UK mortgage market is still at rock bottom. A report by Moneysupermarket.com has highlighted the fact that there are just under 2,300 deals available in the wide mortgage market, which is less than half the figure available 12 months ago and 90% below the figure available at the height of the property market in August 2007.
When you also consider that first-time buyers have just 1,195 products to choose from against around 20,000 just two years ago this really does demonstrate how the sector was shrunk during the recession. This report does cast doubt upon the introduction of new headline grabbing mortgage arrangements over the last few weeks and last few days which appeared, in the opinion of many, to have signalled the bottom of the market. However, it looks as though funding for the UK mortgage market is still not widely available hence the number of packages available to the wider public has been reduced substantially.
We now stand at the "chicken and the egg" situation, where money markets require more demand before cheaper funding is released and mortgage providers require further demand before they will apply for additional liquidity. This is a real issue which needs to be resolved before the sector, and the UK economy, can move ahead.
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