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Curtailing of mortgages 'won't affect house prices'
29/10/2007
Despite the fact that a number of lenders have withdrawn mortgage products from the market, solicitors in Northern Ireland are unlikely to find that their clients report any change in property prices directly attributable to this.
Moneyfacts website has reported that the number of overall buy-to-let and residential mortgage products that are offered by lenders has dropped by 40 per cent in the last three months.
Additionally, due to the number of people in Britain and Northern Ireland who have defaulted on mortgage repayments, 72 per cent of bad credit buy-to-let mortgages and 54 per cent of bad credit residential mortgages have been dropped within the last quarter.
However, going by the opinion of the Council of Mortgage Lenders (CML), even solicitors in Belfast, where the property market has held concerns for many, are unlikely to see many of their clients reporting house price changes due to the withdrawal of mortgage products.
Bernard Clarke, spokesperson for the CML, explained: "I don't think the availability of mortgages is going to be affected to such an extent that it will affect the housing market. The housing market continues to be underpinned by consumer demand for owner occupation, strong aspirations for owner occupation and there's a shortage of supply. Those fundamentals will continue to underpin the market to a much greater extent than any shortage of mortgage products to customers."
He added: "What's driven the housing market is what drives all markets, and that's supply and demand. Clearly that has led to prices rising significantly faster than incomes for a long period of time so while we expect the fundamentals of strong demand for home ownership and the shortage of the supply housing to continue to underpin the market, we do think there will be a flattening off of house price growth for affordability reasons."
Mr Clarke concluded: "I'm not sure there is a lack of confidence in the housing market overall. There are still strong aspirations to home ownership and any easing of prices would mean buyers who have been priced out of the market would have opportunities to enter the market and will take them."
Despite this positive statement, Belfast solicitors can still expect a slowdown in property prices, as Mr Clarke conceded that there would be some differences in individual locations as regards to the impact of the current credit squeeze.
Visit our residential property services page
Moneyfacts website has reported that the number of overall buy-to-let and residential mortgage products that are offered by lenders has dropped by 40 per cent in the last three months.
Additionally, due to the number of people in Britain and Northern Ireland who have defaulted on mortgage repayments, 72 per cent of bad credit buy-to-let mortgages and 54 per cent of bad credit residential mortgages have been dropped within the last quarter.
However, going by the opinion of the Council of Mortgage Lenders (CML), even solicitors in Belfast, where the property market has held concerns for many, are unlikely to see many of their clients reporting house price changes due to the withdrawal of mortgage products.
Bernard Clarke, spokesperson for the CML, explained: "I don't think the availability of mortgages is going to be affected to such an extent that it will affect the housing market. The housing market continues to be underpinned by consumer demand for owner occupation, strong aspirations for owner occupation and there's a shortage of supply. Those fundamentals will continue to underpin the market to a much greater extent than any shortage of mortgage products to customers."
He added: "What's driven the housing market is what drives all markets, and that's supply and demand. Clearly that has led to prices rising significantly faster than incomes for a long period of time so while we expect the fundamentals of strong demand for home ownership and the shortage of the supply housing to continue to underpin the market, we do think there will be a flattening off of house price growth for affordability reasons."
Mr Clarke concluded: "I'm not sure there is a lack of confidence in the housing market overall. There are still strong aspirations to home ownership and any easing of prices would mean buyers who have been priced out of the market would have opportunities to enter the market and will take them."
Despite this positive statement, Belfast solicitors can still expect a slowdown in property prices, as Mr Clarke conceded that there would be some differences in individual locations as regards to the impact of the current credit squeeze.
Visit our residential property services page
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