Well last month there was information that lending for homeowners had increased month on month albeit by a small amount. But yesterday we got some more figures that contradicted that news. It seems that on 2008, the amount of mortgages offered was the lowest in history, falling by 47% on 2007.

Apart from the so called credit crunch it is believed their is plenty demand fro mortgages it is just the large deposits need to secure a home owner loans that is preventing many from buying especially first time buyers.
The measures put into place to encourage lending has yet to show continuous positive figures to prove it is working and with interest rates down to there lowest level ever, which is great news for borrowers, those trying to save for their deposit are getting very low interest rates in return.

There is a belief that this current trend is unsustainable and it is very possible that more people may pay their mortgage off than take up news ones. The frustrating thing for estate agents is that there are plenty of first time buyers wanting to take advantage of the drop in property prices, but cannot get on to that lender because of the higher deposits required fro security.

Waiting for Februarys stats will see if the trend will continue into 2009, or banks are at last lending more as promised.

Out of the blue came a report that house prices had risen by nearly 2% over the month of January 2009. The report came from the Halifax, whose figures have surprised some analysts. There were claims by so called specialists that we should not take one month figures as an indication the market was improving and suggested the trend was still downwards.

The Halifax house price index is published each month based on its own trading figures, which of course could be different for other mortgage lenders.  What is sure that Februarys figures will be a point of interest, either to dispel January figures as a blip or an indication that maybe some house prices had not reached there lowest level.
There were also comments stating that there were much fewer homes on the market at the moment, which in itself may have influenced a small price increase. There is also the human element, a new year and a new start and those who may have been put off from last years doom and gloom may have decided now was the time to buy.

If we thought that last months interest rate cut was exceptional, then look at what the Bank Of England has delivered yesterday.  They have once again delivered a record breaking interest rate cut down to 1%. This is clearly good news for those with mortgages providing the banks pass on those interest rate cuts down to the consumer.

However a mixed message came from small businesses who are saying it is all good and well reducing interest rates, but many banks are just not lending to certain business types or in fact increasing interest rates because they feel they are too much of a risk. The underlying message is good for existing borrowers, but not yet teh solution for first time buyers.

Many first time buyers are still no too impressed, with some mortgages requiring a 40% deposit. Of course the lower interest rates are also affecting the savers, and for many first time home buyers, they are a saver before a buyer.
A suggestion on a major national news channel yesterday was for the government to offer an interest free loan to cover the deposits required by mortgage lenders, to get those looking for a home into the market much quicker. The criticism was the interest rate cut is a good step, but probably will make little difference to last months already very low cut. The government needs new initiatives, was the suggestion, to cover the reasons why banks are just not lending money, was the comments.