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The UK Mortgage Market Reinvented

by Jim ONeil on March 23, 2011

in Mortgages

Before the financial crisis that began in 2007, the UK commercial and residential mortgage market was considered one of the most competitive in the world. Unfortunately, this changed for the worse during the crisis. Long product combinations like sub-prime, self-certification, interest-only tracker 95 percent loan to value mortgages have been sent away like bad children.

Mortgage buyers may now only choose from plain loans.

The Financial Services Authority wants to limit the creativity of the market. This begs the question of how the market will be able to innovate. Mortgage Strategy consulted several experts to get the answer. These folks compared the past, present, and future to present an overall view of the mortgage industry, so pay attention, consumers.

Some experts feel that there was too much innovation in mortgage products before the credit crisis. They say the market was about growth and products were not priced or structured for risk. Everything went to extremes and it all fell apart.

In the past decade, offset and buy-to-let loans have been the most innovative products. Regulation is now establishing the ground rules for future product innovation.

Deals for first-time buyers exist, such as unsecured loans from Hitachi Capital and a deal from Barratt Developments that funds deposits from a borrower’s parents. There is money to be lent in the form of secured and unsecured loans.

First-time sellers also create market opportunities, like the let-to-buy arrangement.

Providing tax relief for money saved for a mortgage is one way the government can stimulate the market. If the unemployment rate increases significantly, the government could use housing to provide the economy with a boost, as it did during the recession of the early 1990s.

Builders and lenders can also do things to create a new version of mortgage indemnity guarantees, enabling higher loan-to-value mortgages.


Stop reading the comics = they are usually incorrect = even the Times 'Reporters' typically can't add 2 & 2 without ending up with 5 = and as for the trash press (Sun etc) their 'Journalists' grasp of finance is non existent = any that don’t have a 'college' education likely took Media Studies & Politics (especially the Politically Correct version)

If you have already informed the Benefits people in writing about your Mortgage Insurance, don't worry about getting over-paid = in my experience those working behind the counter in the Job Center couldn't get a job serving at McDonalds .. but there is always at least one person in each Government Department who actually knows what they are talking about and sooner or later the fools will give them the information and you will be asked to pay up.


Mortgage lending dropped by more than 60% during March as activity in the housing market remained quiet. Quite alarming if you ask me

Rich C

Fantastic advice for anyone planning to enter the buy-to-let market:


The mortgage dilemma – should you fix or go variable?

Steve B

Stop reading the comics = they usually get it wrong = even the Times 'Reporters' typically can't add 2 & 2 without ending up with 5 = and as for the gutter press (Sun etc) their 'Reporters' grasp of finance is effectively zero = any that do have a 'college' education probably took Media Studies & Politics (especially the Politically Correct version)

Joshua Sallop

Mortgage Strategy is indeed a comic – I wouldn’t beleive anything you read in there. For expert advice speak to a broker – preferably one that is whole of market.

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