Stubborn mortgage lenders hold property market hostage for profitMake Text Bigger
Estate agents have slammed stubborn and self-serving mortgage lenders for holding homeowners and homebuyers hostage for the sake of their own profits.
Peter Bolton King, head of the 10,000-strong National Association of Estate Agents accused banks and building societies of manipulating the market by failing to grant more loans.
He added that property professionals expect interest rates to rise next year and that the Bank of England’s monthly rate announcements will have a major impact on the housing market.
Any recovery in the market, he warned, is strongly dependent on the major lenders making mortgage finance more available.
“The housing market remains in a state of fragile recovery as the year ends. Frankly, however, this recovery is threatened by the stubborn refusal of major lenders to loosen their self-serving restrictions on mortgage lending,” said Mr Bolton King.
House prices unlikely to fall much in 2011
“A historically low rate of interest has benefited those people who already have a mortgage, but it is likely that over the next 12 months it will rise. That will place more pressure on existing borrowers but also remove mortgages from the reach of even those house buyers with large deposits. “
Mr Bolton King expects the housing market to face a tough year, but is confident that house prices will not plunge.
Estate agents do predict the rise of ‘postcode power’ – as premium areas emerge from the slump at a faster rate than others.
Estate agents also warn that a backlog of pent-up demand for property in the short term could potentially distort prices with a rush of demand when mortgage borrowing becomes easier.
Mr Bolton King added: “What we will see is the emergence of ‘postcode power’ – as demand for property in some areas fuels a healthy market while other, less desirable areas, are in danger of being left behind.”
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