Copyright (c) 2008 Steve Smith

The UK mortgage market is beginning to return to a state of normality after an extended period of high prices and easy access to property purchase loans, Your Mortgage has claimed.

While many homeowners may be worried about tumbling house prices and first-home buyers may be struggling to get their foot on the first rung of the property ladder, the market has for some time been inflated beyond realistic levels, presenting people with a home sales environment that was “too good to be true”.

For those who are having difficulty securing finance for a property in this unfavourable climate, taking out a personal loan may be an effective way to boost the amount of cash that can be put down as a deposit, thereby encouraging lenders to extend finance.

Meanwhile, Your Mortgage said that both buyers and sellers should brace themselves for an extended period of adverse property conditions, with a recovery not expected for at least 12 months.

Commenting recently, Barney McCarthy, editor of the independent advice website, said that the recent falls in house prices would not necessarily help first-time buyers enter the market.

“While house prices are lower than they have been for a long time – so it looks more affordable – the actual lenders themselves are more reticent to actually lend the money and are actually requiring much larger deposits than before,” he said.

However, Mr McCarthy went on to remind people that the current situation is not as dire as it could be.

“The situation at the moment isnt as bad as people make out; over the last couple of years it has almost been too good to be true and now it is returning to something more approaching normality,” he commented.

However, he did say that the days of easy access to loans and credit had been resigned to history, suggesting that many Britons will have to work harder to secure finance for the foreseeable future.

For those who have found themselves shut out by banks as the financial woes have rumbled on, taking out a bad credit loan may prove an effective way to begin to repair damage done to their finances. In applying for this type of loan, people could find they are able to begin to make regular payments on items outstanding in a bid to present a more positive image of their financial position to banks and other lenders.

Meanwhile, Mr McCarthy concluded by suggesting that while some would struggle as cheap mortgage lending began to dry up, he said that this could soon pave the way for a more measured approach to borrowing where consumers are less likely to struggle to keep up with mortgage repayments. In such a scenario, consumers could find that it becomes easier to put money aside each month. According to research carried out by Nationwide, a quarter of Britons currently feel that they are not saving enough money, although more than half (52 per cent) said they are hopeful they will be doing so in six months time.