Following claims that UK borrowers could face higher interest rates because the crisis in the eurozone has made it more expensive for banks to borrow, Stockton said snce November last year, lenders have been closely monitoring their sales volumes by imposing stricter lending criteria and new restrictions, making it harder for new borrowers and homeowners looking to move off un-capped standard variable rates to access funds with competitive rates.
He said: “It has been reported that over a million borrowers have already been affected by the recent hikes in mortgage costs and we have seen rates for an average 75% LTV mortgage steadily rise up by the best part of 1%, increasing average monthly repayments by up to £73.”
“We would speculate that the continued issues within the eurozone leading to increased wholesale funding and other liquidity issues are all playing a role in preventing the banks from lending.
"With the two largest lenders already declaring their intentions to reduce their market share, it is clear that there is little appetite to increase mortgage lending at a time when millions are looking to fix their rate.
“Without any downward price pressure from central government and the newly formed Financial Policy Committee, mortgage rates will not come down from the 0.75%-1% increases we have seen over the last six months or so.
"In our opinion, this reinforces the need for the introduction of lender targets from the government which could be of great benefit to the housing market.
“Those with a larger deposit will still obtain the best interest rates, but the majority of buyers and remortgage customers are now realising that it is much more difficult to borrow or move their mortgage now than it was six months ago."
