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Property and Mortgage Markets (2007 Credit Crunch (Post Credit Crunch (Low…
Property and Mortgage Markets
2007 Credit Crunch
Housing Boom
House price increases
Sub-prime lending
Low income
Poor credit ratings
Securitisation
Packaged sub-prime/ prime mortgage loans
Sold to financial institutions
Provide income/capital repayments
'Exploding' Mortgages
Low initial interest rate
Increased rate
Irresponsible lending
Increased defaults
Housing Halt
Mortgage company liquidation
increased interbank lending
Widening Crisis
Fall in share prices
Increased lending %
Bank bail outs
Bank run in the UK
Banks request government funding
Investor insecurity
Withdraw money
Global Financial Crisis
Credit Crunch
Rise in Commodities (Oil)
Reduced bank lending rate
Stimulate grow
Post Credit Crunch
Low confidence/job losses/pay freezes
Sellers sitting, no new buyers
Government funding mortgages initiatives
Lenders stricter affordability requirements. (MMR)
Contemporary Mortgage Market
Increased Confidence
Increased house price overall
Out/In London
Supply remains low
Decrease house price
North/Scotland
First time buyers
Government Initiatives
Buy to let less attractive
Affordable housing
Stricter affordability
Higher deposits
Steady increase since 2007
Mortgage Market
Affects
Interest rates
Level government borrowing
High individual borrowing
Monetary policy
Foreign interest rates
The economy
Consumer condidence
Employment
Supply demand
Inflation
General Infflation
Housing Inflation
Government action
BTL
Changes to interest relief
3% Stamp Duty
Help-to-buy ISAs
Non-property funding
Second mortgages
Long terms
Lower rates
Utilise increased equity
Mortgage Finance Providers
Banks
Building societies
Insurance companies
Specialised mortgage companies
Wholesale funded
Centralised mortgage lending
Packaged Mortgages sold to lenders
Sub-prime and specialist lenders
Buy-to-let
Other
Second charge loans
Bridging finance
Local authorities