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Access to mortgage finance should become easier in 2013

Monday 4th February 2013

Access to finance should become easier for homebuyers in 2013 thanks to innovations such as the Government’s Funding for Lending initiative.

Just Mortgages, the independent mortgage High Street broker, believes a greater use of the Funding for Lending scheme by major lenders in 2013 will help make it easier for people, particularly first time buyers, to get on the housing ladder over the next 12 months. It also believes the reaction of individual lenders to the forthcoming Mortgage Market Review, the findings of which come into force in 2014, could mean some players lending more ahead of its start date.

Total net lending for the third quarter of 2012 rose by almost £500m according to the Bank of England as the benefits of Funding for Lending began to trickle through to the market.

David Miles, director of Just Mortgages, said: “Innovations such as Funding for Lending as well as First Buy and New Buy will go some way towards making it a little easier for first time buyers to purchase a property.

“However, they won’t be enough on their own to overcome what remains a generally challenging mortgage market. While the number of products coming onto the market is increasing, lending conditions [as well as criteria] as a whole continue to be tough and until these ease, the mortgage market will remain broadly flat in terms of transactions for the time being.”

Just Mortgages is also forecasting continued growth in Buy to Let mortgage applications in 2013. Last year, they averaged 13% of all applications. At the same time, the number of Buy to Let Remortgage applications is forecast to significantly rise. Remortgages doubled for the year in 2012 compared with 2011, as more landlords than ever before looked to release capital in order to purchase additional properties.

“Buy to let is definitely helping to drive the mortgage market at the moment,” added Miles, “and based on current demand from applicants the trend looks set to continue for the foreseeable future.”

              

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