March 17, 2008

Banks move to change mortgages

Normally you would expect to see mortgage lenders falling over themselves these days to grab what little amount of mortgage business that is out there. But it seems that the credit crisis has had a lasting effect on the lenders who are currently reviewing the whole process. In the mean time many lenders are actually cancelling their mortgage offers.

Clearly this has a lot do with the banks being unable to borrow enough money themselves at the right rates. The sector that appears to have been hit the hardest is the buy to let market; many lenders have pulled all of their deals in the sector, including Mortgage Express and Cheltenham & Gloucester.

This move will have knock on effects, such as preventing many first time buyers from getting onto the ladder and in turn this will mean that lack of affordable mortgages could push the home repossession rate up from 27,000 in 2007 to an estimated 45,000 in 2008! It looks as if the credit crisis is far from over.

Source [Telegraph]