The UK housing market seems to be stalled and is contributing very little to economic recovery. House prices have fallen as more homes come into the market and few buyers are biting the bait of low house prices, low interest, and attractive mortgage products. Lending continues to be constrained and required deposits are out of reach of the majority of buyers. All of the above UK housing market conditions, could be said for the US housing market as well.

Recently, Wells Fargo and Company, the largest US mortgage lender requested that US regulators set a new down payment standard of 30% on mortgages. Their basis is that then only those that can truly afford mortgage debt could attain lending, and there would be less risk to lenders. Those in the US housing market criticized the suggestion and worried such a policy would further stress an already struggling housing market.

Regulators agreed with critics and voiced more confidence in the 80% loan-to-value mortgage as a better standard.

Meanwhile, as in the UK, the US mortgage lending market has seen an increase in remortgage. The increase is coming off of a year-long low. The Mortgage Bankers Association’s index of loan applications in the US reported an increase of 5% in the week ending January 14. The remortgage gauge rose 7.7%, which was the largest increase seen since October 2010. Purchase mortgages saw a two-month low in the US.

Remortgages have also increased in the UK. The increasing inflation rate has prompted a concern that the standard base rate will soon move upward from its lowest level since World War II of 0.5%. Also, lenders have been offering very competitive deals on remortgages attempting to lure customers away from their current mortgage lenders.