Banks are to blame for mortgage shortage

UK mortgage lenders are still causing the slowdown on the housing market. The recent data demonstrates that at the moment mortgages are more difficult to obtain than before the credit crunch. According to Moneyfacts, although the number of new mortgage deals available increased by 66% since the beginning of 2010, they are only offered to those who can put down large deposits.

58% of all the mortgage deals available in the UK at the moment ask borrowers to put down a deposit of at least 25% of the loan’s value. The good side is that currently a great number of the best deals are offered to borrowers who can put down a 25% of deposit, while during the previous funding shortage most deals were available for those borrowers who had at least 40% of deposit.

The figures from the personal finance analyst show that the number of mortgage deals available now has increased by two-thirds since the first month of 2010. However, 58% three in five of them require a  deposit constituting a quarter of the loan’s value, whereas borrowers who can put down only a 10% deposit have only 8% of all mortgage deals on offer at their disposal.

Melanie Bien, of Private Finance, said that even though borrowers who had not more than 20% of deposit were offered a number of deals by mortgage providers, in fact they gave preference to more reliable borrowers with a minimum of 25% of deposit.

As a rule, mortgage lenders provide these borrowers with more attractive interest rates and not so tough credit scoring. Borrowers who ask for 90% loan-to-value mortgages have to pay a substantial premium on the rate and, what is more, face tougher credit scoring, which in many cases leads to the rejection of the mortgage application. As for the first-time buyers, they have practically no chances of getting a mortgage.

Andrew Hagger, of, commented that mortgage providers still exhibited caution, unwilling to repeat the mistakes of the past. Despite the increased competition on the mortgage market throughout the current year, more than half of the available deals still need 25% of deposit.


The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

When we put efforts into our work and get paid for this, we get an amazing feeling of satisfaction. Our hard hard work seems to have been remunerated financially. We go shopping and buy the items we need and the items we simply want.