Where Now for Property and Mortgages?
The recent doom and gloom in the property market has led to many property investors and property owners being left in negative equity which has ultimately led to more and more mortgage defaults. The mortgage industry has suffered the biggest declines in the lending market and it may be a while before the residential and commercial mortgage lenders have healthy balance sheets to enable them to lend more money.
Gone are the days when a large number of lenders were happily accepting bad credit mortgage applications. The situation has totally reversed and the lending has significantly dried up for even good credit residential and commercial mortgage borrowers. This has left genuine borrowers struggling to get mortgage financing on the property ladder and the whole property market has come to a standstill.
So what does all this mean for the future of property and mortgages? Well one thing is for sure, the increased regulation being introduced by governments around the world will mean that it is unlikely that irresponsible lending will ever come back. That suggests that the credit lines will be more limited than they were a couple of years ago and more responsible lending will underpin the future growth of the mortgage and property market.
There will inevitably be more suffering to come for property owners in terms of repossessions as unemployment increases, but on the longer term view over the next 5+ years, a more solid recovery will emerge once the balance sheets of the banks improve to open up more lending. That will mean a return to “proper” investing and growth for future prosperity.
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