A new report from the Bank of England warns that Britain could face fresh problems in the property market, with the availability of mortgages falling over the coming months. Reduced mortgage availability will mean that those mortgages that are available will be less affordable too. The report also reveals that, whilst mortgage availability has been increasing over the past quarter, the demand for them has actually been falling.
A spokesman for Ernst and Young, Dougald Middleton, said, “While the survey shows that costs of borrowing have eased over the last quarter, we think credit conditions have turned over the last three or four weeks.”
The outlook seems distinctly gloomy for consumers, and banks are blaming this forecast on the tightening of wholesale funding. Conversely, the default rate on mortgages and loans has fallen, so it’s good news for the banks at least.