‘Stanifords prediction comes true’
In an article that Stanifords prepared on Monday 28th September we highlighted the change in the libor rate that was announced on the 25th September and with an explanation as to what the libor rate meant to the base rate, made a sweeping prediction and we quote “Our prediction for 2010 would be to see an increase in the money supply through the increase in the number of mortgage products that its self will stimulate growth in the mortgage market, linked with a realisation and an necessity that loan to values particularly associated for first time buyers will be relaxed”!!
YES YES YES
We confirm that our sage like prediction has already come true with HSBC making a pledge to introduce an extra 500 million pounds to home buyers applying for 90% mortgages, this move will end the desperate shortage of high loan to value mortgages required in the property market, particularly by the likes of first time buyers. Where HSBC lead rivals such as Lloyd’s Group which includes the Halifax are expected to immediately follow and their response increasing the number of mortgages and the amount of lending and higher loan to value is seen to be a clear sign of the end of the property market readjustment (for those of a less nervous disposition collapse)
In the last 18 months the number of 90% home loans collapsed as a result of le- crunch, previously there were some 900 products that were available widely in 2007, the number of products fell by the beginning of 2009 to less to 120 and that number fell again at the beginning of September to around 100. So from a market normal supply in 2007 of 900 it could be seen to be an abnormal under supply in 2009 of 100.
As we predicted banks have had to wake up, and realise the way they make money is by lending money, this realisation has obviously been sitting waiting for libor to come into line with the base rate.
Confidence in mortgage lending is paramount to the property market first and foremost, but more importantly to the country and the countries economy. I wouldn’t be bold enough to suggest that the property market determines the economic fortune of the country but a strong property market is associated with a strong economy.
The view of HSBC in making this bold step is at odds with some city analyst and hopefully has put to bed the scare mongering thought that there maybe a property dip in 2010, and that the revival of the property market in the fourth quarter of 2009 could be heralded as a false dawn.
For reader of this column we refer to a previous article headlined as “Three quarters of the way to recovery”
As a leading firm of Independent Chartered Surveyors we feel it is absolutely essential that we are at the cutting edge of the market to provide our purchasers and sellers alike with up to the moment information that is relevant to the sale of their house.
The most fundamental market force in the last 12 months showing the last 18 months in the property market in East Yorkshire has been the lack of money supply. Today’s announcement by HSBC to be followed by numbers of lenders will see smaller lenders such as our own Beverley Building Society come back into the market place as competitive mortgage lenders which in itself will complement of the revival of the property market.
Find out more about property for sale in Beverley and mortgage products availible to you – visit Stanifords or call – 01482 631133