Mortgage Blockade: The Cavalry are coming; from the East!
The most recent statistics for the mortgage market in England and Wales have shown a small increase in lending. Lending was up 26% in July, but this was still 36 % down from the monies the Banks and Building Societies lent in July 2008
More in depth analysis shows that one of the main reasons has been the shrinkage, by a substantial 26% in number of mortgage providers operating in the Housing Market in England and Wales. Gone in the last year or so are names such as GMAC, Giraffe and Egg.
Gobbled up by bigger banks are household brands such Alliance & Leicester, Bradford & Bingley, Birmingham Midshires. We almost lost the most efficient of them all, the Cheltenham & Gloucester, C&G, but happily the Lloyds Banking Group may be having a change of heart.
With such a contraction of the mortgage market, it is inevitable that others will view the scarcity of mortgages as a potential opportunity to gain market share. Step forward, the Bank of China, the Swedish owned Handelsbanken and the Israeli owned Bank Leumi (UK).
Banks and Building Societies have been accused of profit taking by adding to their margins. Any increase in the number of mortgage providers and an increase in availability of mortgage finance will provide welcome increased competition and hold down rising mortgage costs.
This should further strengthen the fragile recovery in the Housing Market in England and Wales