At long last there seems to be an effort to resolve the current credit crisis. This is a bold statement and perhaps comes 8 months to late but nevertheless would seem to be good news. A permanent cloud has been hanging over the mortgage market since August last year and it now looks like there are signs the government have…
Category: Uncategorised
Sub prime lending
The current market conditions, particularly in the sub prime area have been triggered by events in the US where an entirely different set of circumstances has led to a liquidity crisis, a slump in the housing market and real fears about the health of the overall economy. The conditions in the UK sub prime market are fundamentally different. Some UK…
Interest rates lowered to 5%
Interest rates in the UK have been cut by 0.25% to 5% by the Bank of England's Monetary Policy Committee (MPC) today. It is an attempt to stave off the threat of recession in the UK economy and to try and offset the ongoing credit crunch. It is the 3rd cut in interest rates that the bank has made since…
Innovative solutions needed for funding crisis
It has taken only 9 months for the once thriving mortgage lending sector to be brought to it's knees by global investors losing confidence in mortgage backed securities. The specialist (sub prime) sector has been hit hardest with many lenders either constantly repricing, withdrawing products or withdrawing from the market entirely. The majority of these lenders depended on the securitising…
Arrears crisis is possible
With the liquidity squeeze showing no signs of disappearing there are strong fears this will lead to an arrears crisis. Lenders need to restore confidence and start expanding their product ranges again. An article published recently showed that 23000 mortgage products have been withdrawn by lenders in the last 6 months from mortgage sourcing software programmes. This shows the extent…
Buildings and contents insurance
It is very important to both lender and the borrower that the mortgaged property is adequately insured. For the lender, the property is the prime security for the loan that has been made and it is essential that it is insured against any event that would adversely affect its value. Similarly, the borrower needs to protect his home. From a…
UK housing market and mortgage weakness
Many lenders are taking comfort from the initial assessment that the UK market will experience a soft landing for house prices in 2008. However, the overall picture is likely to disguise a wide variation in house price growth and transaction volumes across sectors and regions. Localised sharp falls in demand could result in house prices for certain types of property…
Problems in the mortgage market
Companies working in the mortgage market have experienced a significant series of events which completely changes how mortgage business will be done in the future. A lot of anger has been directed at lenders for changing criteria and hiking interest rates when the UK Bank of England base rate has been going down. The problem is that there are good…
How much of a problem is world inflation?
In the current economic climate The Governor of the Bank of England believes the threat of inflation is a higher priority than the meltdown in the financial sector. The Bank has recently dampened down expectations of an interest rate cut based on world inflation pressures and concerns that this could translate into spiralling wage costs. Wage inflation does need to…
Rate cut needed soon!
The Bank of England's Monetary Policy Committee (MPC) needs to cut bank base rates by 0.5% by early summer to boost the struggling mortgage market. Interest rates need to be reduced from 5.25% to 4.75% by early summer. That would help matters. It will make things slightly easier for consumers and the housing market. The move should reduce borrowing costs…