Millions lack the mortgage finance to move home
Millions of Brits cannot currently move home because they lack equity in their property or do not have access to the mortgage finance necessary, an expert has said.
Some 3.5 million people, around one-third of all home mortgage holders in the UK, are currently finding that lenders will not provide them with the subsidies they need to get out of their existing property, the broker said.
Others included in this figure are experiencing negative equity or have seen the value of their house drop to under ten per cent more than the purchasing price.
Yet more property owners are holding subprime or self-certified home mortgages.
Ray Boulger, senior technical manager at the firm, claims that the Treasury Select Committee's recent Mortgage Arrears and Access to Mortgage Finance report was naive in its understanding of the market.
The committee's study found that some home mortgage customers' arrears were spinning out of control and banks were failing to help them.
Mr Boulger added: "When most people move they rely on the equity in their property to provide the bulk of the deposit required for their new property, which is currently a minimum of ten per cent in most cases, plus moving costs, of which stamp duty land tax is often the biggest."
"Having such a large number of households who are currently unable to move is not only a serious problem for the people concerned, but also has important macro economic consequences," he added.
John Charcol recently said, however, that studies by major banks from the past few weeks are cause for optimism when looking at the home mortgage market.
The latest of these reports was one by the Council of Mortgage Lenders, which showed that advancements of home loans was up 23 per cent in June compared to the previous month, while remortgaging activity was also up.
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