Lending conditions continue to improve and we expect this trend to extend into next year as banks revise up their lending targets for 2014, according to Knight Frank Finance.
This environment of less constrained lending is also being seen in the large loans market with increasing numbers of high street banks willing to lend up to £5 million. This is a welcome development as it not only increases competition in the large loans market, but firmly conveys the message that these banks are open for business. Some might equate larger loans with higher risks, but perhaps counter-intuitively, it tends to be borrowers active in the large loan market who have more assets to fund their loans and so therefore are lower risk.
Mortgage rates remain at near record lows with five year fixed rate deals on offer for less than 3% and we believe that they have ‘bottomed out’. With the prospect of interest rate rises, albeit not for another year or two, these rates will only be moving in one direction in the future and that is upwards.