Mortgages and Remortgages: the Perplexing Riddle of Supply and Demand

The economy has been subject to a large degree of speculation over the last quarter following whispers of an anticipated recovery and tentative signs in isolated sectors of the financial world. Not without exception, the markets for mortgages and remortgages have been under particularly intense scrutiny as the health of the property markets have typically been utilised in a barometer capacity in gauging the overall health of the economy.

Subsequent to news released today by the Council of Mortgage Lenders, there has been a significant slowing down of the increase in demand for mortgages. Donna Green discusses the statistics released and investigates the expert opinion on issues that are likely to arise as a consequence of this reflection on the market situation.

There have been several sets of information pertaining to the health of the property market, in particular the much debated growth of the mortgaging sector amidst a general set of fluctuations within the economy. With the Council of Mortgage Lenders publishing statistics that suggest the mortgaging market is experiencing an increase in demand in a stable demeanour, it echoes the warnings issued by Connells Survey and Evaluation.

The concerns being voiced over the stability of this reported growth in the property sector are predominantly rising as a result of the potential that the market could stagnate. The statistics published by Connells Survey and Evaluation purport that the underpinning of growth and recovery within the demand for mortgages is arising from existing property owners as opposed to first time buyers. These findings are supported by figures documenting a 75 per cent increase in valuations requested on properties in the third quarter of 2009 compared with the quarter three of 2008.

The Council of Mortgage Lenders have detailed the alternative should a stagnation of the market be avoided: the recovery of the market is predicted to be subject to particular peaks and troughs throughout the next twelve months. Following the noted growth of the market in the last twelve months, the poor recovery of remortgaging and equity release markets, combined with an increasingly strong requirement for at least 25 per cent deposits highlights that concessions in the mortgaging market will need to occur for the whole market to recover successfully.

The CML have cited that analysts expect the next twelve months to witness a decrease in the mortgage lending sector of between six and seven per cent, with isolated recovery of this downturn predicted to take a further two years subsequent to this. In order for the economy to sustain these fluctuations in the market, the sector is required to relinquish a great deal of the tentative stability attained with a pragmatic approach to the housing markets in their entirety.

It is crucial, should an individual wish to explore the possibility of applying for a mortgage or a remortgage to seek independent, professional mortgage or remortgage advice so as to obtain a comprehensive overview of the economic health of the property markets.


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