Crunch Time for Mortgage Products
A recent study attempted to find out how many mortgage products there are. The findings surprised some as there are fewer deals around.
The credit crunch does not bode well for mortgage products, 10,000 of which have been withdrawn. Last summer’s offerings included 15,000 products, but the study revealed that there are now only 5,000.
In recent weeks there has been a withdrawal of nearly 500 fixed and variable-rate mortgages, which means that consumers now have far less choice since the start of the turmoil in the money markets.
Borrowing criteria are being tightened and borrowers are raising their rates. These conditions mean that many households would be unable to remortgage. This will create problems for those households due to come off their fixed-rate deals during the next year. This might force them to stay on with their previous lender, and possibly at a higher rate.
The Newbury, Melton Mowbray and Tipton, all small building societies, mentioned they will only deal with local people.
Sellers who refuse to lower their prices may be to blame for unsold houses that are still on the market. Last month saw an increase in the average house price. However, Rightmove, a property website, confirms buyers were waiting for an average drop of 10 per cent in the asking price. Their commercial director, Mr. Miles Shipside, noted that sellers who enter the market might be ignoring other unsold properties as strong competition, and that they are oblivious to the challenges homebuyers now face.