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Mortgage finance - Graham Lock, Housenetwork.co.uk

Mortgage finance - where now?

Running a nationwide estate agency gives me a tremendous insight into the entire property market and all aspects of buying and selling a home. One of the most important ingredients of this is mortgage finance or should I say the severe lack of it available to millions of people.

The credit crunch and subsequent recession has hit the high street lenders where it hurts in a way that was unimaginable in years gone by. What was that? Did I hear “Banks losing money”? Ok I can take that, but banks actually going bust? Surely not...

Well of course we all know what happened – the banks gambled with our money and lost - but we’re over that now, like any good loser we dust ourselves down and saddle up on the bike once again, but what we want to know is what happens now? What lessons were learnt? Will it happen again? And finally how the hell do I get a mortgage on my house with only a 10% deposit?

Unfortunately I cannot find the answers to these questions nor it seems can any of the politicians who assured us all that printing billions of pounds would be the answer to our problems, yes that’s right the politicians that said don’t worry we’ll lean on the banks and get them to lend to you again. Oh really – and how hard did Mr Darling lean exactly? It appears he mustered a gentle prod in the general direction of the banks that laughed it off and told him they’d do it their way regardless. I’d of made them sign something when they were on their knees with the begging bowl out for our cash, just before they were about to disappear into the graveyard of banks gone-by.

Banks bailed out

What makes it so hard to accept is that we bailed the banks out with taxpayers money not just now but we’ve increased our children’s tax burden for years to come whilst the banks build up their cash reserves by borrowing money at 0.5% and lending it out at 4% (but only if you have a 30% deposit of course, oh and a perfect credit score) the rest of us who don’t meet their new strict criteria just have to suffer it, what about building up our own cash reserves during the recession? Not a chance of borrowing anything at the moment but just to help us out the banks will put up the interest rates on credit cards, thanks a bunch.

I have associates who are in the mortgage market and for them it’s been a total horror story, thousands of mortgage deals have turned to dust, re-mortgaging has become almost impossible for millions and first time buyers are once again being blocked from entering the market without help from bank of mum and dad.

The future of the housing market depends on our ability to borrow money with a reasonable deposit and at a rate that is more in-line with the base rate. This is the complete opposite at the moment and the longer it goes on the more pain for everyone on the other side of it.

Graham Lock

Graham Lock, MNAEA, is co-founder of www.housenetwork.co.uk, a low cost nationwide estate agency which to date has sold over 2,700 properties using online marketing methods only whilst disregarding local newspaper advertising www.housenetwork.co.uk

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