Are UK banks controlling the UK property sector?

Amid signs that the demand for UK property is bubbling below the surface, there is growing concern that UK banks are holding back the UK property sector. Despite the fact that there are now around 66% more mortgage arrangements available than at the start of the year, these financial arrangements are not within the grasp of many first-time buyers. So what is happening in the UK mortgage market?

As we touched on in one of our earlier articles, 58% of mortgage arrangements available today demand a minimum deposit of 25%. While the mortgage companies will argue that there are 90% mortgages available to those with limited funding, these often attract very stringent credit check criteria as well as premium mortgage rates. There is no doubt that until we see a significant increase in liquidity, and a reduction in deposit requirements, the UK mortgage market has limited scope for growth in the short term.

Like so many areas of the UK economy the UK banking arena is yet again in control and holding back potential growth by limiting the level of liquidity available today. All attempts by the UK government to force the mortgage industry to increase liquidity and reduce deposit requirements have so far fallen on deaf ears.