Price of loans falls

Posted: 17 Apr 2009 10:34:17 GMT

The average price of the five leading loans across the UK has dropped for the first time in over six months, it has been revealed.

Such news could prove promising to those selling a home online as relaxed lending could signal the start of more mortgages and quicker sales times.

The new research from consumer website moneysupermarket.com has found that the "five leading loans" in the country dropped their average annual percentage rate by 0.2 percentage points.

March 2009 saw the average loan cost 8.88 per cent compared to the current price of 8.68 per cent.

Tim Moss, head of loans and debt at moneysupermarket.com said: "Banks and building societies are more cautious about who they'll lend to than in pre-credit crunch days, which has made it much harder for consumers to get loans.

"And the clampdown on the sale of payment protection insurance (PPI) has caused providers to hike up prices to recoup lost revenue."

Given that increasingly strict measures regarding mortgage lending has widely been acknowledged to have added to the problems in the housing market, such a relaxation of loan price could bring about some genuine confidence in the market.


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