95% Mortgages – Prices To Blame Not 95% Mortgages
95% Mortgages Not To Blame
Declining demand for property is forcing a general drop in house prices. With too few buyers being outweighed by sellers, a mortgage drought with very few 95% mortgages, and general uncertainty with the economy pressure is on for prices to fall. The impending increase to the base rate may be the final straw.
House builders are naturally suffering and there was an angry outburst by Steve Morgan, the chairman of Redow a leading house builder in the UK who said: “Deliberately suppressing housing demand at the very time that the country has a chronic housing shortage is laying the foundation for the next boom/bust cycle.”
“For generations 95% mortgages have been the norm … Yet the current generation of first-time buyers is being denied the opportunity that their parents and grandparents took for granted, simply because they are unable to secure an affordable mortgage with a modest deposit.”
However, this statement is not really true as 95% mortgages were introduced around 20 years ago, not really an opportunity that grandparents had to grasp.
Fundamentally house prices are still too high and this is the truth house builders have to look at and accept, and its over-pricing that will lead to future boom and bust, not the lack of 95% mortgages.
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