Recession Watch : The UK mortgage market
Ever since the UK government realised that the UK banking sector was effectively in freefall we have seen calls for mortgage liquidity to be increased to "spend" our way out of the recession. However, up until the last couple of weeks there had been no sign of increased liquidity in the UK mortgage market and even less instances of competitive mortgage rates and mortgage offers. However, companies such as HSBC, Royal Bank of Scotland and to a lesser extent Northern Rock have now come to the fore with significant funding put aside for mortgage liquidity.
HSBC was one of the first to break ranks in the two-year fixed rate mortgage market offering a 4.99% deal which was fully one percentage point better than the next best offer on the market. This has not only grabbed the attention of would-be first-time buyers and others in the market place, but it has also grabbed the attention of competitors. For the first time in literary 18 months we could well see an injection of significant competition into the UK mortgage market which could help to refloat the property sector in the short to medium term.
Mortgage liquidity is one element of a potential recovery in the UK property market which has been missing for some time, although the return of competition in the sector and liquidity could not have been better timed.
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