Lenders are continuing to impose strict lending criteria and ration the mortgages approved despite having access to cheaper funds through a new Government scheme.
Maidenhead, Berkshire Lenders are continuing to impose strict lending criteria and ration the mortgages approved despite having access to cheaper funds through a new Government scheme.
Despite the lending scheme, there has been little improvement in mortgage availability for borrowers who are unable to provide a large deposit.
Things at present don't seem to be easing up for first time buyers in particular. Young people are still unable to get their foot on the ladder, thus improving letting conditions for buy to let investors.
Richard Alton runs Alton Mortgages, a whole or market broker based in Maidenhead. Established in 2005, customer service is at the heart of what they do, and they recognize that their clients are individuals with very unique requirements. He says:
"It is a little bit naughty when the banks continue to ration mortgages for first time buyers and people with low deposits when Funding for Lending has been released meaning people with higher deposits get the lower rates whilst the rest don't benefit. Lending is all about risk and reward and I guess the bottom line is until the Government underwrite the risk why should the banks offer low rates to the more risky type of loans. The Government then has to keep the whole population happy so if the British public have to take responsibility for high % mortgages I expect this wouldn't be well received so the whole thing is a balancing act!
"As a whole of market mortgage broker we have seen some fantastic deals available and have been incredible busy on both remortgages and purchases, but I do agree people with smaller deposits have seem to have missed out on this gold rush for low rates.
"In terms of the Funding for Lending Scheme it is a very cheap way for the banks to get money as they only pay 0.25% interest so they lend the money out at 2.5% for example and then charge a £999 fee you can see they can make plenty of money, the more they lend overall the more they can get access to this scheme but there is nothing to incentivise the loan to value of the lending this is left to the banks discretion and guess what the banks are cherry picking. This coupled with still tight criteria means that things are still tough when trying to apply for a 90% loan.
"I agree it is still early days for the scheme and the FSA has now announced the new rules for lending which have to come into in 2014 so maybe over the next few months we may see the banks easing up on First Time Buyers, but the real key to getting credit flowing for first time buyers would be to give them access to cheaper rates."
Notes to Editors
Alton Mortgages is an established whole of market mortgage broker based in Maidenhead, Berkshire. Established in 2005, customer service is at the heart of what we do, and we recognize that our clients are individuals with very unique requirements. Click here( http://independent-mortgageadvisor.co.uk/why-use-a-broker/ ) to find why you should use a broker. We work with individuals and families to provide them with an exceptional residential mortgage service. Click here( http://www.altonmortgages.co.uk/ ) to find out more about Alton Mortgages