Sky News business editor Michael Wilson
If you wanted to know how the credit crunch would knock on your front door and begin to take up residence, then First Direct’s halting new mortgage lending is the prime, or perhaps sub-prime, example.
First Direct had been offering two year fixed-rate mortgage deals of 4.95% - one of the most competitive rates on the market.
Unsurprisingly, borrowers have been biting the lender’s hand off. While First Direct, owned by HSBC, is keen to stress that this is just, as it were, buying a bit of breathing space, it’s part of a much wider squeeze.
Today NatWest/RBS also tightened their own terms,and last week Nationwide, the UK’s second largest mortgage lender,and Cheltenham and Gloucester, which is parented by the might of Lloyds TSB, increased their rates to avoid being swamped – not least by the 1.4m people who are coming off their cheaper 2 year fixed-rate mortgages and needing another.
All this may put a larger For Sale sign over the housing market, as it becomes more difficult to buy.
The new management at Northern Rock is set on halving its mortgage book – in other words, persuading those whose loans expire to go elsewhere, at the very least, so that will soon start adding a further pull on available borrowing.
But the sadder aspect is still the old, old story. Even before the credit crunch, first time buyers were finding it hard enough.
They might have thought that falling house prices would have made their search for a home easier. But it won’t, if there are fewer, more expensive mortgages to fund their dream home.
Sir
Looking thus far as the element of mortage demand and supply, naturally like other such elements of consumer supply and demand pertinent to the interest of both parties service alongside customr retention should remain at the forefront whilst allowing persona judgment to focus upon what are lifes fundamentals.
Naturally the enjoyment of fixed rate options provide very much to market choice, the answer is [Staright Up] choice [Paula Abdul]. But what would a market be without jitters?
Posted by: Khalid 2 Apr 2008 16:17:23
Des London
Quite right...storm the Bastille(BOE)
Posted by: Elizabeth Davies Cape Town 2 Apr 2008 13:54:46
I'm a broker and have been infomed today that Lehman Brothers have closed SPML and Preferred Mortgages two of the largest last remaining Specialist lenders. Where does this leave the mortgage market?What are the FSA going to do do about their much trumpeted Treated Customers Fairly when the major banks show complete contempt for applicants by withdrawing products at short or no notice and profiteer by inflating mortgage rates.Instead of preaching to brokers on this issue and burying them in mountains of irrelevant red tape why don't they along with the BOE do something about this crisis?
Posted by: Des London 2 Apr 2008 12:41:11