Credit Crunch

The global ‘credit crunch´ has led to a sharp reduction in the number of mortgage applications in the UK according to recent figures, reducing the number of potential buyers in the property market.

The number of mortgage applications fell 37% between October 2007 and October 2006 according to the British Bankers Association (BBA), with just 44,105 mortgages approved for property purchase compared to more than 70,000 twelve months previously.

Rising interest rates and the so-called ‘credit crunch´ have been blamed for the drop as banks and building societies look to reduce their element of risk following problems in the American sub-prime mortgage market.

As a result, the number of potential property buyers is reducing whilst it is also believed that the number of rejected applications has increased as lenders struggle to borrow capital from rival banks to fund new mortgages.

“October´s data provide evidence of a rapidly slowing mortgage market and of consumers limiting their personal borrowing,” the BBA´s director of statistics, David Dooks, said.

“Pressure on household finances, the cumulative impact of interest rate rises over the last year, the expanded application of home information packs and the consequential impact of the credit crunch may well all have a part to play in suppressing current demand and supply.”

The lack of mortgage applications and the reduced number of buyers is of significant concern to homeowners looking to sell their house fast although Swift Capital could provide a solution.

Swift Capital promises a fast cash sale for your property without depending on any mortgage or external funding, meaning that there is no chance of a property falling through due to circumstances beyond your control, such as a rejected mortgage application.