We won’t have cheap credit for ‘a number of years to come’

According to a financial analyst, Brits will not be seeing the days of cheap credit “for a number of years to come”.

Darren Cook, a spokesperson for Moneyfacts.co.uk, said that some experts have predicted the Bank of England base rate will increase another three times before the end of the year.

“These uncertainties, paired with the house price adjustments and many households finding themselves in negative equity, [means] lenders are prudently hedging themselves on pricing due to fears of a massive increase in the probability of default,” Mr Cook commented.

In related news, Experian recently advised consumers looking to secure a loan to check their credit report first.

By doing so, consumer education manager at the organisation James Jones said that consumers give themselves a better chance of their loan application being accepted as they can make sure that the information on their report is correct before it is checked by a lender.

Tags: James Jones, England base rate, personal finance, bank of england, Brits, Darren Cook, loan

Rate falls ‘will not affect mortgage market’

Any drops in the interest rate over the coming year will have little affect on the mortgage market, an industry expert has said.

According to Firstrung, following the credit squeeze this year the market is “completely detached” from the Bank of England base rate, with the average rate at two per cent higher than that of the base rate.

Paul Holmes, chief executive of the mortgage brokers, commented: “We always used to look at Bank of England decisions to see what our mortgage rate was going to do.

“But all of a sudden the dislocation, the gap, is huge between what the lenders do and what the Bank of England does.”

He added that in excess of 40 per cent of mortgage products have been “stripped” from the market, although there is no shortage of products.

Furthermore, he said, there is a need for a “contraction and consolidation” of the market, rather than increased product innovation.

Tags: lenders, base, base rate.paul holmes, bank of england, average rate, mortgage, year, England base rate