Housing Market

This graph shows the sharp decline in mortgage lending since the onset of the credit crunch.
Banks have been unable or unwilling to lend because:
Falling house prices mean there is greater risk of negative equity. Therefore banks have been requiring higher deposits making it more difficult for people to buy a house
Lack of funds. Many of [...]

Traditionally, the minimum deposit for a mortgage was 5%. This gave homeowners a LTV ratio of 95%. For a house worth £70,000 this would require a deposit of £3,500. In recent years there was an increase in popularity of 100% mortgages and even 125% mortgages. However, with the credit crunch making mortgage lenders more nervous, [...]