'Deposit decreases needed' for mortgage market momentum

Date:Tuesday 15th December 2009
Author: Max Freedman

Mortgage lenders need to being reducing their deposit requirements before the market begins to be revitalised, according to one sector commentator.

Lee Grandin, managing director of Landlord Mortgages, stated that until this takes place, the sector will continue to falter.

He said that, at present, mortgage customers are divided into two groups - those who have enough cash for a deposit and those who do not, suggesting that interest rates have less of an impact on when people enter the market than immediate access to funds.

Mr Grandin made his remarks after Nationwide issued figures indicating that average house prices rose by 0.5 per cent in November, which is the same rate of increase that was recorded in October.

He asserted: "The only thing that will get momentum going is when the mortgage lenders start to reduce the deposit requirements. That's not happening to a large degree at the moment."