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No change to mortgage crisis

July 30, 2008 by admin  
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There has been no change to the mortgage crisis in the UK despite government intervention, according to the Council of Mortgage Lenders. Officials from the CML have said that the problems in the mortgage industry are still ongoing, and the squeeze on credit and mortgages continues even though the government has pumped billions of pounds into the money market and has launched a £50 billion mortgage rescue plan that allows lenders to swap their mortgage assets for government bonds, which is aimed at restoring confidence amongst lenders and increasing liquidity in the mortgage sector.

Michael Coogan from the Council of Mortgage Lenders said: “The next few months will remain very weak for house purchase activity for the funding reasons which are now well rehearsed. We still await first signs of the Bank of England’s special liquidity scheme indirectly helping to ease the current logjam.” After peaking last summer mortgage lending levels have been in steady decline, fuelled by the global credit crunch, which has seen lenders really tighten up on their lending and eligibility conditions and has left many people unable to get a mortgage.

This has had a knock on effect on house sales, with sales figures plummeting despite the fact that house prices have fallen. Although lower house prices would normally have resulted in an increase in demand the credit crunch has left many unable to afford to buy due to higher interest rates, tighter credit conditions, demand for higher deposits from borrowers, and even increased arrangement fees on mortgages. Potential purchasers are also worried that house prices will continue to fall, as predicted, and do not want to be left facing negative equity.

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  1. Watchdog to probe sale and rent back says:
    August 3, 2008 at 9:38 pm

    [...] No change to mortgage crisis [...]



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