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The announcement of the Lloyd's Bank takeover of HBOS may result in a further reduction in mortgage lending in the UK.
HBOS currently lends over one in five mortgages throughout the UK and although it is very early days, as the banks set to merge, there is little doubt that the move will have a serious affect on the already struggling UK market.
HBOS have the highest ratio of lending to first time buyers than any other bank. It is hoped that the lending policies of Halifax will be kept as it will be disastrous for the UK mortgage market if the lending policies of the bank were wiped out.
We have already witnessed a 12.5% collapse in house prices over the lat 12 months and many of the banks are being held responsible. Jointly Lloyds and HBOS hold over 28% of the country’s market.
Are the falling prices due to the lack of mortgage availability?
Well it could be argued that the lack of mortgages has certainly given way to a sharp fall in prices. Although the downturn has primarily been a problem down to lack of liquidity in the mortgage market. The Bank of England’s decision to aid the short-term supply of funding to lenders will help keep the market up for a while yet many remain uncertain over the future.
Lending has fallen by 36% since last year, and it looks like the road ahead still remains rocky. The future is unclear and you cannot be certain as to how long house prices will decline. Lenders remain uneasy over their funding and their future funding, whilst consumers are uncertain of what lay in store. Many now wait for the market to bottom out and it still isn't clear as to when it is expected to do so.
Will the UK mortgage market feel the effects of the HBOS takeover?
The announcement of the Lloyd's Bank takeover of HBOS may result in a further reduction in mortgage lending in the UK. HBOS currently lends over one in five mortgages throughout the UK and although it is very early days, as the banks set to merge, there is little doubt that the move will have a serious affect on the already struggling UK market.
HBOS have the highest ratio of lending to first time buyers than any other bank. It is hoped that the lending policies of Halifax will be kept as it will be disastrous for the UK mortgage market if the lending policies of the bank were wiped out.
We have already witnessed a 12.5% collapse in house prices over the lat 12 months and many of the banks are being held responsible. Jointly Lloyds and HBOS hold over 28% of the country’s market.
Are the falling prices due to the lack of mortgage availability?
Well it could be argued that the lack of mortgages has certainly given way to a sharp fall in prices. Although the downturn has primarily been a problem down to lack of liquidity in the mortgage market. The Bank of England’s decision to aid the short-term supply of funding to lenders will help keep the market up for a while yet many remain uncertain over the future.
Lending has fallen by 36% since last year, and it looks like the road ahead still remains rocky. The future is unclear and you cannot be certain as to how long house prices will decline. Lenders remain uneasy over their funding and their future funding, whilst consumers are uncertain of what lay in store. Many now wait for the market to bottom out and it still isn't clear as to when it is expected to do so.
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