A number of recent reports have highlighted massive problems in the mortgage market lately, with many concerned over the lack of liquidity in the financial sectors, which is restricting mortgage lending enormously. Officials from the Council of Mortgage Lenders recently stated that urgent assistance from the Bank of England was necessary in order to ease the problems that the mortgage sector has been experiencing, and the agency stressed that the problems were set to get worse if nothing was done to increase liquidity.
In a recent announcement the Bank of England has agreed to intervene by pumping an additional £5 billion into the banking industry, which will go some way towards easing liquidity. The Council of Mortgage Lenders stated that there was a seven percent drop in mortgage lending in February compared to January, adding that lenders were simply unable to meet demand because they were experiencing difficulties in raising finance to fund their lending. This has seen many mortgage lenders having to cur back severely on their lending by turning away new customers, taking various deals off the market, and making their eligibility criteria more stringent.
Michael Coogan from the Council of Mortgage Lenders recently stated: “We have entered a substantially slower phase in the housing market and there will be ongoing problems in the mortgage funding markets unless the Bank of England makes new, broader based attempts to improve levels of liquidity in the UK. Demand for mortgages remains strong but cannot be fully met from existing funding.”
He went on to state: “As credit conditions change markedly from day to day, lenders will continue to rapidly adapt their products and pricing to match. This is a vital response to the uncertain conditions.”
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Buy to let mortgage figures increase | iLoanApplication said,
April 2, 2008 @ 5:10 am[…] Ongoing problems in the mortgage sector […]