Mixed signals from the UK mortgage market
June saw an increase of 15% in mortgage advances which rose to £13.1 billion, the highest level since December 2009. This traditional seasonal boost to the UK mortgage market is a welcome piece of good news for the industry which has been struggling to push ahead over the last few months. It will be interesting to see whether this short-term pickup in mortgage advances continues for the rest of the year as many experts believe the UK property market will struggle to remain in positive ground over the next six months.
Despite the fact that UK base rates have remained at 0.5% for many months now this has had little impact upon the UK mortgage arena. Competition in this sector is currently fairly thin on the ground although we have seen a number of competitive periods over the last two years. One of the major factors holding back any short-term recovery in the UK mortgage market is the inability for first-time buyers to raise sufficient funds to get themselves on the property ladder. This is a problem which is unlikely to disappear in the immediate future and could well weigh heavy on the sector.
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