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A general lack of new low interest loans is affecting the housing industry in many different ways. As a result of newly higher interest rates, many homeowners are finding that their once low interest loans are now very expensive. In addition, banks that offer low interest loans right now are few and far between. There are very few choices available for those even with perfect credit if they are trying to get a low interest loan in the current climate. As a result, new home purchases have dropped significantly.

CML director general, Michael Coogan commented: “Monthly house purchase lending volumes continue to be lower than last year’s levels and there will be a further weakening in coming months as recent approvals data has shown. The squeeze on mortgage funding has led many lenders to tighten their lending criteria. While tighter criteria make it more difficult for some borrowers to obtain a mortgage, they also reduce risk in a slower housing market. There has been a resurgence of fixed-rate lending as borrowers are seeking certainty. This trend is likely to continue as the anticipation of future Bank base rate cuts has diminished.”

Related reading: Low Interest Loan