Mortgages back on the rise, at last!

The first three months of 2012 are set to see a rise in the number of mortgages available to first time buyers, according to the Bank of England. That’s got to be good news for estate agents, removals and small builders alike who depend on movement in the housing market for business. The bank’s latest trends-in-lending report said, ‘lenders expect the availability of secured credit to households to increase slightly in 2012 Quarter 1, with the rise concentrated on borrowers with high LTV (loan-to-value) ratios'.

The £3bn HSBC has pledged to lend to first-time buyers will also help people get off the expensive rental market. Although the average rental price is still 4% higher than it was a year ago, landlords have dropped rents in England and Wales for two consecutive months now.

Tim Hyatt, president of the Association of Residential Letting agents(ARLA), insisted the last two month’s trends are set to continue. He believes the rise in tenants struggling to meet their monthly rent payments coupled with the ease in demand for rental property will soften the market.

High rental rates paired with Christmas expenses led to 10.7% of all December rent being late or unpaid. A recent survey by online estate and letting agents findaproperty backed Mr Hyatt’s point by showing the stock of rental properties to be at its highest point since 2009. This led to a 1.1% December fall in landlord and estate agent’s rental asking price, bringing the monthly average asking price to £861.

Some have suggested that this respite could be temporary - mortgage conditions and a struggling economy may cause credit conditions not to ease in the coming year. Therefore first-time buyers might not be able to secure finance and if this happened demand for the limited supply of rental accommodation will increase and rents will return to their upward trend.