House prices in the UK are plunging, with fewer buyers looking to purchase properties. Those selling their homes have to compete with each other, and many are trying to undercut their prices to secure a sale. In addition those who are looking to buy are putting in low offers in the hope of securing a bargain in this unsteady market.



Banks and other financial lending institutions have tighten their lending criteria meaning that many first time buyers are no longer able to get a foot on the property ladder. The British Banking Association recently said that the number of mortgage approvals in May 2008 had fallen by more than 50 percent compared with the same month the previous year. The total number of mortgages approved was the lowest it had ever been since records were collected in 1997.

But it is not just who the banks are prepared to lend to that has changed, it is also the amount that they are prepared to lend. Previously mortgage lenders would be willing to lend to prospective buyers at one hundred percent of the purchase price of the house. Some people even got deals for one hundred and ten percent. Nowadays these types of deals are all but gone, meaning that unless new buyers have a reasonable deposit they will struggle to find a mortgage. Unsurprisingly the total amount of money lent by the banks has decreased over the last year but the actually percentage decrease was higher than industry experts had expected.

The only sector of the mortgage market which seems to be reasonable strong is the area of remortgages. Up to one million homeowners are expected to reach the end of fixed rate deals at some point this year and will be looking to remortgage to a cheaper deal than their current mortgage lender's standard variable rate. Recent figures have shown that there has been only a ten percent decrease in remortgage approvals from last year which proves that this part of the market is much stronger. It also means that banks still need a way of finding good customers to sell their products to.

It is in these situations that mortgage lead companies can help. Lenders want to find customers which meet their strict lending criteria, which include good credit ratings and large deposits. If people are remortgaging banks like to see that they have not defaulted on any payments and that there is still considerable equity in their properties. Mortgage lead companies use the tool that has become increasingly common in the search for financial products – the internet. They set up websites for people searching for mortgages and then use a number of questions to screen their suitability. They then bundle together the details and sell them to the mortgage companies who finish the deal. This system can work well for both the customer and the lender as a good match is always searched for, and anything that helps the housing at the moment can only be considered a good thing.