Is there a "mortgage shortage"?

EdInvestor

The idea seems to be emerging in the media that due to the credit crunch a shortage of mortgage money is developing and this could cause house prices to crash.

There has been evidence (also reported here) that some lenders are pulling out of the murkier parts of sub-prime lending, and that people with adverse credit risk are being charged higher rates.

But is there any evidence of a shortage of money (or availability only at very high rates ) for ordinary prime borrowers and ordinary BTL investors as a result of the credit crunch?

The mortgage approval rates don't seem to be showing a shortage yet - last month's were down, but in line with the cooling market due to recent interest rate rises.A couple of importnat lenders (A&L and B&B) have just reported they have secured a year's worth of funding.

So is this just more undue pessimism in the press or is it based on reality?

Interested to hear any comments.

maninthestreet

Lenders have certianly tightened their lending criteria, and some people who would otherwise been approved for a mortgage are now being turned down. Whether than can be described as a 'mortgage shortage' is a matter of opinion.

EdInvestor

IFAonline


This article refers to the destruction of the "sub prime buy to let market",which was apparently less than a year old.

A merciful death, perhaps?

Dan_Collins_2

Well I dont think its a shortage as such, not on the high street, they are being very careful though. Abbey have made the target for thismonth but only just and we are finding biz as normal in most places.

Sub prime is all over the place though!

mstar

i am worried too... i got a offer for my mortgage pending a valuation survey is on monday i am reading on here that lenders are not lending much. after my valuation can the lender withdrawn their offer? even if the house is valuation is correct and the agreed price i am paying, and no defects with the house?

poppy10_2

Nationwide are increasing their mortgage rates by 0.25% from Tuesday

Dan_Collins_2

mstar wrote: »

i am worried too... i got a offer for my mortgage pending a valuation survey is on monday i am reading on here that lenders are not lending much. after my valuation can the lender withdrawn their offer? even if the house is valuation is correct and the agreed price i am paying, and no defects with the house?

I would not worry unless you are with a sub prime lender, even then I would be surprised. A few lenders have got strict, giving deadline dates for pipeline cases awaiting further documentation. A lender can withdraw its offer at any time but unless they have good reason they will not.