Mortgage lending in the UK is becoming more accessible

The month of July 2013 was the strongest for lending to property buyers in the UK, since the financial crisis. Banks increased the size of the LTV – the ratio of the size of mortgage loan for the purchase price.

In July 2013 the residential property market in the UK was approved 56475 loans, 21% more than in July 2012 – 46796. This is the best indicator since 2007.

Due to the large size of the LTV for loans to UK banks in July 2007, indicators July 2013 nearly broke the post-crisis record. Loans with extremely small Deposit – less than 15 percent were issued in July 6946 – 56% more than in July last year – 4446.

Despite the significant growth of prices for houses and apartments in the UK, the sharp increase in the size of the LTV is reflected in the increase in the number of mortgage loans, which asked the people who bought the property cheaper than £125000 . £125000 – a key indicator for the property market in the UK, because it is above this amount, all purchases are subject to stamp duty. The sum of which is below – that the vast majority of the typical size of the transaction, which are committed by first-time buyers bought their homes. In July 2013, these buyers became 12989 , which is 21 % more than in July 2012. Thus, low-income part of the population now have more opportunities to purchase their residential property in the UK.

But the potential of the mortgage market has not been realized. Loan growth among low-income buyers is constrained by low wages and high inflation. Many potential buyers can’t accumulate on Deposit, as their costs are rising, but wages are not increasing.

In addition, the rising cost of real estate itself for many moves even further while the long-awaited purchase. According to the latest data, the average price of residential property in the UK hits record – is £232801.

The statement of the head of the Bank of England Mark Carney, that the Bank of England intends to keep the refinancing rate unchanged until then, until the situation with the economy and wages are not normal, sounded as it is impossible by the way.

The real estate market in the UK hope that a stable rate of the Bank of England will give confidence to all market participants and, ultimately, contribute to positive developments in the market.

® Helen Antre 11.08.2013.