Homeowners To Get Mortgage Help
Homeowners are going to get help to ensure their homes are not repossessed the government said last week.
This announcement was made after key figures in the mortgage industry met with the chancellor, Alistair Darling, and the housing minister, Caroline Flint. The ministers however did not outline actually how they were going to implement this strategy.
The CML (Council of Mortgage Lenders) stated that the meeting was useful and said that lenders were playing their part in enabling customers to keep their homes.
An estimated 1.4 million people coming to the end of their short term
fixed rate mortgage deals, and concerns have been raised about their expected steep rise in repayments, especially amongst the people who do not have much equity in their properties.
The number of mortgage deals available on the market has now dipped below 4,000 as a result of the current financial climate. This is a dramatic change on the figure of 13,428 products available at this time last year.
The two factors behind the increase price of mortgages are 1) a shortage of liquidity in the market and 2) a lack of confidence in the housing market.
The lack of liquidity has been slightly alleviated by the Bank of Englands £50bn plan to swap mortgage debts for government bonds to help them out during the credit crunch.
This move was welcomed by lenders and that in due course it should help banks and building societies ensure competitive mortgage products were available.
To ease tension in the market, Ms Flint stated that the housing market is not in the same situation as it was in the early 90's as the demand for housing is still high, with first time buyers and young families particularly looking to buy.