Camden mortgage market busier than usual in Q4 2014 but lending more restricted
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Mortgage approvals across the UK fell by 23 per cent between January and November 2014, and are set to remain tightly controlled into 2015.
Halifax’s House Price Index for November 2014 showed that the volume of mortgage approvals for house purchases fell from 76,611 at the start of the year to 59,029 in autumn.
While the availability of secured credit rose slightly in Q4 last year, lenders were less willing to take risks.
Loan to income ratios fell significantly during the same period, and were expected to fall further at the start of this year, according to the Bank of England’s Credit Condition Survey.
Despite this, Camden mortgage brokers reported that they were busier than normal for the time of year during the final three months of 2014, with a wide range of buyers looking to secure mortgages on properties in the borough.
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Farryl Rabinowitz, senior mortgage adviser at Ablestoke Financial Planning said: “Property across London is very expensive and we’re still looking at people trying to scrape together 10-15 pc deposits.
“On average in Camden you need a minimum of £50-60,000 so a lot of people, particularly first-time buyers are relying on the Bank of Mum and Dad.
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“We see a lot of public sector workers, NHS nurses and so on. A lot of the nurses I deal with work normal hours on basic pay, which is quite minimal, but lenders will factor in weekend work and overtime and they do earn a decent amount, although they are working very long hours.
“They also tend to use a lot of the schemes, like shared ownership, rather than buying on the open market.”
Lenders also reported being less willing to lend at loan to value ratios above 90 pc in the last months of 2014, despite widespread advertising of 95 pc loans.
Rabinowitz said: “The people obtaining loans at 95 pc are few and far between and the rates at those levels will be very high.
“It’s only when you’re getting an 85 pc loan that you’ll get quite a good rate, somewhere around the low 3 pc. Compared to the average over the past 10 years, when you were looking at more like 5 or 6 pc, then that’s when you start to see the difference.”