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The Masked Tulip

Bank Of England Warns Of Tougher Curbs On Mortgage Lending

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The Bank of England has warned that obtaining a mortgage is about to become even more difficult.

http://www.telegraph.co.uk/finance/personalfinance/8035882/Bank-of-England-warns-of-tougher-curbs-on-mortgage-lending.html

Thousands of people could be refused a mortgage or be required to find even larger deposits than previously. It will also underline fears that Britain's household budgets will be squeezed further, increasing the chances of a "double dip" recession.

The Bank of England warned yesterday in its Credit Conditions Survey report that lenders had "tightened credit scoring criteria" over the past six months, and expect to tighten them even further during the next three months. It said lenders had told them they were adopting a more "cautious approach".

Melanie Bien, of Private Finance, an independent mortgage broker, said: "Recently, rates have improved, making mortgage repayments more affordable. But the tougher criteria will mean that people won't be able to get a mortgage at all, or will only be offered higher rates when they remortgage. It is going to get really tough for borrowers."

Financial experts yesterday said the plans were based on flawed logic, as borrowers who were considered vulnerable would be lumped with higher costs. Andrew Montlake, of Coreco, the mortgage brokers, said: "Lenders are getting nervous that unemployment is going to see a rise in the number of borrowers who will experience difficulties meeting their mortgage payments.

"However, if lending criteria tighten and people are unable to remortgage on to attractive new rates, then this will just make the problem worse."

The tougher lending criteria coincide with suggestions from the Financial Services Authority that banks should be even stricter with borrowers and should carry out regular checks to ensure that they can afford interest-only mortgages.

The Council of Mortgage Lenders said yesterday that this would mean that interest-only mortgages would "effectively vanish".

Looks like the UK HPC could well be in the middle of 2011 sometime.

Edit

Earlier this week Charles Bean, the deputy governor of the Bank of England suggested savers should stop complaining about poor returns and start spending to help the economy.

Analysts said his comments showed a blatant disregard for the financial reality facing households and warned this approach would build up problems for the country in the future.

Knob!

Edited by The Masked Tulip

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Knob!

...even better was Oona King on This Week this morning mentioning 'the redistribution of wealth' in this country ....where do we dig these people up ....wealth can only be earned ...and surely she means 'the redistribution of debt' ...this country has no wealth.... :rolleyes:

Edited by South Lorne

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  • 153 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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