Chelsea Building Soceity has been hit by mortgage fraud to a tune of £41m. The drought in credit has created a surge in fraudulent applications by fraudsters and other criminals. Bridging finance lenders has especially been recently targeted due to their ability to lend in the current climate and due to their speed. Clients’ solicitors are now being vetted more thoroughly as a strong minority have been involved in buy to let mortgage fraud in the past. Many lenders are reviewing their conveyancing panel with some insisting on clients using a large well-known firm.

Although residential mortgage rates have never been cheaper, the ability to get a mortgage is still very difficult. Many borrowers feel banks are being picking and choosing who they wish to lend to, favouring deals with a very low loan to value and a strong chance of serviceability. There has been more bad news in commercial property lending as a major high street bank has reduced their loan to value ratio from 70% to 65% and even at that level funding is very tight.

According to the Halifax house price index, house prices rose by 1.1% in July but were stil 12.1% lower on a yearly basis. This still represents a large monthly increase with many market commentators calling the end of the housing slump. Attention will now turn to the commercial property market where capital values continue to fall as the glut in commercial finance continues and bad debt soars.