Two-thirds of mortgage borrowers still required to pay heavy deposits

Posted under General, News by Michael

Despite claims of increase in mortgage lending, the borrowers did not get any relief as two-thirds of deals are offered only on heavy deposits.

A latest report by Moneyfacts reveals that 68% of the 1,485 deals are still demanding deposit of minimum 25%.

It is also pointed out that 101 deals were offered at 90% of property’s value in the beginning of March, but the figure is down to 93 deals currently. However the number of deals with 85% of value has gone up significantly from 21 to 258 during same period.

A good news for borrowers is that Lloyds Banking Group and Royal Bank of Scotland will be offering more loans to homeowners who sign up to the Asset Protection Scheme announced by the Government.

Recent reports are indicating recovery signs in the housing market following the Bank of England’s announcement that number of mortgage approvals increased to 38,000 in February, up 6,000 reported in January.

However, keen market observers have cautioned that it will take quite long for the market to reach normal levels.

Mean time the Royal Institute of Chartered Surveyors warned that it is too early to assume that property prices are on the way to recovery, as the Halifax house price index showed fall of 1.9% in the average price in March.

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