Mortgages more difficult to get

It is becoming increasingly more difficult for homeowners and potential homeowners to even find a place offering mortgages to new customers, let alone being given a mortgage to buy a property or remortgage their existing home.

First Direct announced this week that new customers, which included would-be homeowners and those with mortgages elsewhere, would not be able to even apply for a mortgage with them, such is their current backlog of applications from the past few months.

They were the first, and now it seems more are following this trend, as yesterday the Derbyshire building society and Skipton Building society also declared the same tactic.

As the number of mortgage deals available has dropped by 12%, it can only mean bad news for customers. The limited range of mortgage products now available and the reduction in competition, means that we are less likely to be able to shop around for the best offers.

Unlike last year where banks and building societies were fighting for our custom and we had a seemingly endless choice of mortgage deals going, now they seem to have the slightly upper hand and they are the ones being picky and choosy about their customers.

What could this mean for the housing market? Well not only will houses be sitting on the market for much longer because no-one can get a mortgage to buy them, property prices will also fall in a determined bid to shift them. Unfortunately this could mean that many homeowners will end up being in negative equity as the value in their home falls below the balance of their existing mortgage.

The outlook for the housing market is certainly taking a worrying turn.