Property prices are low in the UK. Why individuals are still not buying? Mortgage is the answer in one word. First time buyers and move up buyers are not sure whether they would be able to stay current on their mortgage. The cloud in the employment sector is still lurking; individuals are not sure about the economic forecast.
Moreover, lenders have introduced stricter criteria; after recession even lenders have become skeptical – they are more selective now. Unlike earlier days, not everybody is qualifying for home loans. Hence, even when property prices are low, there is a dearth of buyers.
Cheap mortgages are around the corner
Different building societies in the UK have started to come up with new mortgage range. Leeds Building Society, Coventry Building Society and Lough borough Building Society have introduced easy fixed rate mortgage plans. This is definitely an effort to help prospective buyers purchase homes.
The mortgage products introduced by these companies are quite similar but the rates of interest they are offering are slightly different from each other. The mortgage product being introduced by Leeds Building Society is offering 2.29% fixed rate for first two years. On the other hand, Lough Borough Building Society has reduced the interest of two-year fixed mortgage from 3.55% to 3.35%. And that of Coventry Building Society is 3.05%. However, there are certain
Most people would comment that this will help people buy new homes. But as a matter fact; this would boost country’s economy as well. The main problem with the property market is the buying capacity of people which has reduced in past few years. With this effort by the Building Societies more people would be able to buy homes and this will somewhat neutralize the ‘many sellers less buyers’ situation in the property market.
Moreover, 2012 Olympic is going to be held in London. People are expecting the UK property market to get energized. Landlords and vacation rental property owners are likely to experience a better time in terms of profit. Probably suitable mortgage plans will be introduced by the lenders too.
Once the mortgage industry turns in buyers’ favor things will improve fast. If you ask what is the reason behind such a downturn of the property market then many people would point the finger towards mortgage and lending habits. There was a time when it was easy to get mortgage; and as recession started rolling in many people lost their jobs and found themselves in deep mortgage arrears.
Low fixed rate mortgage for first two years would definitely be helpful for prospective buyers. However, it is always recommended to check the terms and conditions before buying the mortgage. If you are uncertain whether the product is suitable for you or not; talk to an expert.