When will there be the right mortgages available ?

One of the main problems with the property market still, is the availability of mortgages for well positioned purchasers. Despite all the quantitative easing by the government, banks and building societies are still reluctant to lend.
If first time buyers with sensible deposits of 5% or 10% and 3 times income, could more readily obtain funding, on sensible terms the property market would come back to life in an orderly way.
This would encourage more homeowners to place their properties on the market, so the supply and demand balance would be restored.
When is this likely to happen,?
One clue is in interest rates. No not the rate mortgages are offered at but the relationship between the Bank of England base rate and the LIBOR rate ( London inter bank offer rate ) The more these two rates move apart the less likely lenders are to have the funds to lend those realistic mortgages. This is because it is costing them more to borrow the money on the wholesale market, so they have to find ways of making profits from expensive funds.
Once banks start trusting each other again, so the strong banks with funds start lending to the others, money will start to flow again.
This confidence between the banks is reflected in base and LIBOR rates moving closer. So a simple way to monitor potential property market activity is to track these two rates.
As they converge you will see more sensible mortgages being offered to well placed first time buyers something that needs to happen to enable the buying and selling process to start .
While they remain further apart and if you have funds available now is a good time to invest in property.
I must stress this is just one factor to take into account and others need to be weighed up when considering purchasing.
If you have a question on property buying in this market please feel free to contact me by posting a comment.