Secured Loans compared...

Media reports of difficulties in the housing market have fuelled speculation that secured loans are in an extremely limited supply – for a number of reasons. As a result, there are fears amongst some property analysts that the housing market exclusively could decline into a double-dip recession because of its performance.

Some of the main factors include the declines in house prices which are expected for the rest of the year, and this has been brought in conjunction with the negative equity that some buyers are experiencing as a result. This has also been combined with worrying statistics that the number of loans for people with bad credit such as mortgages for homeowners is half the usual levels which are associated with a housing sector that is in growth.

Even though repossessions are also on the decline, the overall picture with secured loans is one of concern, as well over £3 billion has been deemed as toxic assets by lenders, with the borrowers responsible simply unable to repay the money which they might have borrowed in the better financial climate which was seen previously.

The number of secured loan applications which are being accepted by mortgage brokers has been bumped up ever so slightly since June to close to 49,000 – with many people being unsuccessful in their bids to get secured loans compared with a payday loan online. Potential areas of blame according to experts include the lack of quantitative easing which is taking place from the Bank of England, as well as the ‘over-the-top’ cuts which have been taken to reduce the PSNB by the Government, which is cutting further billions more than expected in order to allow the deficit to be cleared faster.

According to an economic adviser from Ernst & Young, the situation is not going to be getting better any time soon. Of the state of the housing sector, Andrew Goodwin commented: “Unemployment levels are high and could rise further as the public sector spending cuts begin to take effect, while household income growth and affordability are poor.”

The volatile nature of the housing sector has made many prospective buyers uneasy about emerging onto the property ladder, and this has been accentuated by the number of people who are making enquiries about buying a home. The amount of enquiries being made hasn’t been this low in two years.

All in all, the amount of money which has been borrowed through secured loans has risen acutely between June and July by £100m. The reason why this rise is acute is because of the comparative rise between May and June, which was £700m: £600m more. This dramatic decline has stemmed overall economic progress in the perspectives of many, and it is widely thought that the prospects for the next couple of years are not going to be any better.