Mortgage Approvals Slump Still Causing Misery

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This week Greenhill finance have continued to notice a dramatic down turn in mortgage lending while there are still less options for borrowers causing many to have increased payments.

The British Bankers' Association (BBA) recently said that lending was down on last month by 18%. This is now the lowest monthly figure since September 1997.

Greenhill have also found that It seems that the banks are unwilling to lend to each other; and this is causing those banks that need funds to become stagnant. What funds they have they are holding onto tightly, and this means they have little to offer the market. They have, in many cases tightened their lending criteria and are now taking very little risk when lending, either for mortgages or personal loans.

David, a senior advisor of Greenhill Finance said "the lending market is very tough at the moment. Most clean cases (those without credit issues) are going though, but only with large deposits or high equity in their houses. Any small credit issues such as a missed credit card payment are being rejected by the lenders - they are just not taking any risks at all with their money lending. Because of this, the new money is not coming into the market which is causing a slow down in the whole system."

This is one reason The Bank of England announced its plans to inject at least an extra £50bn into the banking system to free up frozen inter bank lending. It is hoped that this will relax the lenders to start lending a little more in line with the types of lending last year. Last year high risk lending was common and many companies offered high risk clients a mortgage. If this injection can encourage the banks to lend it may mean good news for those who are moving out of discounted rates, or those hoping to buy a house.
David went on to say, "first time buyers need huge deposits of £30,000 plus in many cases at the moment. The higher lending is just not there, so they need bigger deposits, especially if they have any credit issues. Plus a lot of landlords are just sitting on their money at the moment and not buying more property, this is another source of new money which has just dried up, and would be a welcome return if it can happen'.
Some analysts are still skeptically that this cash injection will help. They believe that banks will not relax too much and therefore the misery could still be common place for many, in which case consumers will need to increasingly use Finance Companies who have less strict lending criteria are prepared to lend to those people that other banks will not.

Greenhill Finance can help select the best secured loan with money in the bank within 21days, please call: 0800 916 4148 or visit http://www.greenhillfinance.co.uk.

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David Reid
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