RSS FeedsUK banks are getting tougher as the credit crunch worsens
29/03/2008
UK mortgages have been slashed by a third compared to this time a year ago. In addition to this purchases of large items fell dramatically this year which is more evidence suggesting that the credit crunch is here and spreading.
As a result of the unceratainty in the financial market and the current global credit crisis, financial institutions have tightened up terms laid out on mortgages. Depsite these attempts to get the econonmy back on track, figures reported yesterday suggested that these measures have done little to help. An indication to support this crisis is mortgage approvals hitting nearly record levels at being at their lowest, down by 33% annually.
"In view of the credit squeeze, the accompanying tightening in mortgage lending standards, as well as fears of further house price falls, the subdued level of mortgage demand in February should be no surprise," a property economist at Capital Economics, Seema Shah said. She continued to say that
"Even interest rate cuts are unlikely to have much impact on the housing market as mortgage rates are falling less quickly than base rates."
Banks are still reamin resreved in borrowing to one another as they continue to be concerned about any debt that may still be lingering as a result of the mortgage crisis in the United States.