Commercial Mortgages Reduced for Property Buyers

The recent financial crisis has claimed many victims and has destroyed a lot of businesses like a hurricane storm working its way through an urban area. One of the factors that has affected both businesses and property investors alike is the considerable fall in the amount of credit that is now available in the markets. Mortgage lenders have pulled a lot of buy to let, residential and commercial mortgage products off the shelves, which has resulted in many homeowners and property investors alike to default on their mortgages. The lack of mortgage lending has also forced a lot of potential property investors out of the property market.

The demise of some of the mortgage lenders and some of the best remortgage  lenders has meant that the ones that remain in business have naturally reduced mortgage lending to reduce risk of losing any more money to risky property buyers. As a result, a couple of key changes have taken place, namely:

1. A lot of the mortgage lenders are assessing mortgage applications with very stringent checks so that only a select few get approved for a  buy to let mortgage
2. The mortgage companies are asking property buyers for much higher down payments then was required in the recent years to further reduce their exposure to riskier borrowers.

Now although this makes a lot of sense from both the banking and the overall economic view point, one thing the changes have done is to sow down the ate at which the property market is seeing sales. The drying up of credit has mean that a fewer people are being given mortgage approvals, which in turn has meant that a significant fall in the number of properties that are being sold on the open market.