Election to spell mortgage drought

  • Story by: Marc Shoffman
  • Magazine: FinancialAdviser
  • Published Thursday , January 21, 2010

Investors have four to five months to take advantage of good mortgage deals before they dry up in the post-election climate, according to Neil Stephens of the Welbeck Group.

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Mr Stephens, head of mortgages for the financial consultancy, said the best mortgage deals will disappear following the general election in the spring.

He said: "I fear the first four to five months of 2010 will mark the last chance to bag a good long-term mortgage rate before the UK house and mortgage markets take time out to assess the impact of the recently elected or re-elected government.

"With commentators forecasting home values to rise first half and fall in the second half of the year, there is a limited window of opportunity before the market stagnates."

Mr Stephens said with both political parties offering to take the UK out of recession at a differing pace, lenders will want to wait and see the impact of the government's policies. 

He said: "Lenders will continue to reduce rates over the coming months before withdrawing from the market over the month of the election.

"Given that house prices will have risen for a year and lenders will have recapitalised, it seems as though the first third of 2010 really represents a hot spot in mortgage lending not to be missed."

Scott Grant, director of Essex-based Clear Financial Advice, said: "There is more competition than three years ago - I do not think good products will just disappear.

"Customers will get something similar regardless of who wins the election."