Mortgage Approvals Fall By 60 Per Cent In One Year To Reach Record Low_1611

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Figures show that the downturn in Britain's mortgage market is crippling homeowners who are trying to get a new loan deal. The number of people succeeding in re-mortgaging has fallen by almost 50 per cent. The most severe drop since the credit crunch began.
Added to this, official figures revealed that people trying to sell their home face the toughest struggle to find a buyer since records began. Experts fear that the situation will worsen next year. A property economist, who works for consultancy Capital Economics, predicts that interest rates will plummet to zero per cent and house prices will decrease by another 20 per cent in 2009. Other professionals agree that the outlook remains bleak.
It is estimated that only 700,000 homes will change hands in 2009 compared to 1.5 million in a "normal" year. The situation is a nightmare for those who are desperate to sell.

Figures, from the British Bankers' Association,You are not allowed to view links. Register or Login, reveal the number of people obtaining a loan to buy a home has fallen to its lowest level on record. Shadow Chief Secretary to the Treasury, said: 'The news that mortgage approvals are nearly two thirds lower than they were before is yet more evidence that Gordon Brown's bank recapitalisation package is failing to revive Britain's flagging housing market.' It appears that the Prime Minister is more interested in saving the world than about getting credit to the families,You are not allowed to view links. Register or Login, homeowners and businesses who need it.
The situation is equally as fraught for homeowners who do need to get a new deal because their existing one has come to an end. The BBA's data reveals that 52,452 people re-mortgaged to a competitor when their current deal expired. This number plummeted to just 29,798, a huge drop of 43 per cent in just one month.
One of the worst problems is that, as house prices decrease, their 'loan-to-value' - that is the amount of their mortgage in relation to the value of their home - rises. The best mortgage deals are only offered to applicants with a LTV of 60 per cent. Many people who need to re-mortgage now are realising that their LTV has soared which means the best deals are closed to them. For instance, your mortgage is 100,You are not allowed to view links. Register or Login,000 pounds and your house was worth 150,000 pounds. Hence your LTV was 66 per cent. Now, your cheap fixed rate deal has expired and you need a new mortgage deal but your home is now worth just 120,000 pounds, which means your LTV has increased to 83 per cent.
Buyers have been scared off by decreasing house prices and worries that the economic slowdown will hammer their budgets,You are not allowed to view links. Register or Login, the British Bankers' Association reported the number of homeowners signing re-mortgages fell by almost 50 per cent during only four weeks - down from 52,452 to 29,798. This constitutes the lowest level for changing deals for eight years.
Mortgage Approvals Fall By 60 Per Cent In One Year To Reach Record Low