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Will the ongoing economic downturn affect the mortgage market forever?

The ongoing impact of the UK recession continues to hit all areas of finance and business with the mortgage market in particular under serious pressure. There is speculation that this latest bout of reality could see UK mortgage lenders change the landscape of the mortgage industry forever. We could see less and less discount mortgages, higher rates to protect profit margins and other similar protections introduced to ensure the sector does not experience another similar downturn. But will this really happen?

As with the boom and bust cycle of the general economy this particular template can be transferred to the mortgage industry whereby in the good times offers and discounts are available to everybody but in the bad times cost creep higher and promotions are few and far between. However, as the general economy recovers UK consumers and homeowners have very short memories as do the financial companies in the UK.

It is highly likely that once the UK economy is on a firmer footing we will see a return of various discounts and promotions to the mortgage market which could again store up future problems for the industry. However, it must be highlighted that the current economic climate is literally a once in a lifetime event and unlikely to re-occur for many many decades, if at all.

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