Figures released by the Nationwide Building Society this week claim that house prices have now risen for the fourth month in a row. Does this signal the end of the property crash and that good times are just around the corner?What the figures don't mention is that in the period from September 2007 to the start of 2009 house prices fell by over 25%. They also fail to acknowledge that getting a mortgage is still difficult and even more so when it comes to Buy-to-Let. From a height of over 3,000 different Buy-to-Let mortgages we are now left with under 200. Every major BTL lender has either stopped lending altogether or cut their lending back severely. The only ray of good news in the BTL mortgage market recently has been the decision by the Bank of China to enter the BTL market.
So why aren't the lenders lending? Why aren't banking groups like HBOS and Bradford & Bingley using the money that we, the taxpayers, have poured into them to help us, their customers? Why are there so few BTL mortgages and why are such large deposits demanded for the few mortgages that are available?
There is no doubt that a significant number of landlords would buy property if only they could get mortgages. There is also little doubt that many first time buyers would also like to get onto the housing ladder. The rise in 'reluctant landlords' proves that there are many thousands of home owners who would like to sell and buy. The problem is that the banks won't lend. The irony is that they won't lend the money we have lent them. The worry is that the Government still cannot or will not make them lend - even though the Government now owns so much of the banking sector.
Maybe we need to spend less time hoping for someone to wave a magic wand and more time waving the big stick at the banks that got us into the mess in the first place.
