Mortgage Lenders Reduced Availability

Monday, 05 January, 2009

British mortgage lenders reduced the availability of credit to borrowers in the last quarter of 2008, it has been claimed. In the three months to mid-December, lenders blamed falling house prices and wider economic turmoil for the reduction in lending.

The Bank of England also claimed that a further decline in mortgage availability was expected in the coming three months. Unsecured loans and corporate credit are also expected to decline in the first quarter of 2009 in line with economic expectations, the Bank claims.

A statement issued by the Bank said: "Default rates, and the losses following default, on lending to households and private non-financial corporations had risen over the past three months, and were expected to rise further."

Meanwhile, chief economist at the Halifax Martin Ellis predicted that there would be "further downward pressure" during the current economic downturn and mortgage lending would be squeezed by reduced incomes and an increase in the cost of lending.

Source: http://www.introducertoday.co.uk/