Mortgage drought set to worsen in UK

Just as the economic outlook was beginning to look toward a rosier future an announcement by the Bank of England last week warned of the possibility of another financial meltdown occurring.

The report from the B of E suggested that the next three months of trading is likely to see wholesale funding conditions tightening. Financial forecasters predict a big drop in loan approvals over the summer months much to the disappointment of millions of UK property owners looking for finance and for those hoping to join the property ladder.

Prior to the recession almost 12,000 products were available across the UK mortgages sector today that figure is closer to 2,500. Figures show that in the months prior to August 2007 agreed home loans were running at a rate of 100,000 latest figures for May 2010 reveal the figure has dropped to 50,000.

Concern among lenders has been building for some time now and the road to recovery now looks that much longer.