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A boom – bust mentality from the major high street lenders has sent the mortgage market into stagnation according to the South West’s largest independent mortgage broker. According to The Mortgage Shop, which has its head office in Plymouth , this presents particular problems for homeowners and prospective homeowners in Plymouth due to low wage rates in the city.

“I find the attitude of the major banks towards lending very difficult to understand. When the housing market was booming they were more than happy to apply a more relaxed lending criteria in order to boost their profits. Surely they should have foreseen that allowing people to borrow 8 times their income, often not requiring any proof of income, and up to 125% of the value of their property, coupled with increased levels of personal debt, would lead to future credit problems. Instead of slowly tightening rules since the onset of the credit crunch, they have almost turned off the tap – potentially making mortgages unobtainable for many people in Plymouth :” said The Mortgage Shop’s Managing Director David Munn .

“The only people benefiting from this situation are the major lenders. They are continuing to increase rates, despite the fact that The Bank of England has reduced them, and resorted to cherry picking borrowers with high incomes, squeaky clean credit records and at least 20% equity in their homes. If the housing market dips, it could spell big trouble for many homeowners:” he continued.

Despite the challenging market conditions, enquiry levels at The Mortgage Shop are up on this time last year due to people wanting to search the whole market to find the most competitive products available. “The problem we face is that the whole market has shrunk considerably. As an independent broker, with access to ever lender in the UK, we have been able to find mortgages for the vast majority of enquirers but we have had to turn some people away due to the unsympathetic attitude of the lenders, even though just 6 months ago they would have been perfectly acceptable to the same Banks that are now saying No! The situation will only change for us as a business when the major lenders, who lead the industry, listen to The Bank of England and the Government and start putting people before profits:” concluded David.