“We’ve turned a corner but there’s still a long road to recovery ahead. Although lending is up, careful analysis shows it is only for those with hefty deposits.
“Even for professionals deemed reliable, it is not plain sailing. Those looking for a mortgage with a LTV of 85 per cent are still going to struggle with a reduction of two thirds in the number of mortgages available since Q2 2008.
“The increase in lending is a tactic to distract us from the reduction in higher LTV mortgages. It is imperative that Banks and building societies repay the good service they have been afforded by both the taxpayer and increased lending. Instead of being greedy, they must relax their lending criteria slightly to allow the economy to begin to stablise again; and by doing this they would still be able to sustain responsible lending policies.”
Mason goes on to offer caution to first time buyers: “First time buyers’ mortgages have increased by 3.3 per cent since July, so it seems to be a great time to start climbing the ladder.
However, my concern is that first-time buyers are so desperate to get on the property ladder that they are putting all their savings into a deposit. They can cope with their mortgage as it stands; but when mortgages rates begin to increase again – as they inevitably will when the base rate creeps up – many are going to struggle. My advice is to wait, as I expect house prices are not at their lowest. This will allow first time buyers to keep a bit of money in reserve so they are able to make the mortgage repayments when interest rates slide back up again.”
