Go easy on borrowers

Published:
05 December 2007
Topic:
News,Money,Mortgages

A City watchdog wants lenders to help 1.4 million fixed rate borrowers whose deals are ending.

Clive Briault, retail managing director at the Financial Services Authority, warned the Council of Mortgage Lenders annual conference there was "a very real prospect" the credit squeeze could get worse next year.

Meanwhile, an estimated 1.4 million mortgage borrowers would be coming to the end of their fixed rate deals in 2008.

Despite this, Mr Briault said "a fairly consistent picture is emerging of some lenders across the market appearing to be unwilling to consider cases on an individual basis, unwilling to agree a solution tailored to the borrower's individual circumstances, and apparently adopting a one-size fits all approach to arrears recovery."

He told lenders that the FSA would be mounting an investigation into the way lenders approached borrowers who might face arrears problems in the wake of the current financial crisis.

Mr Briault's comments come as the Bank of England meets today to decide whether to cut its base rate from its current level of 5.75%. Most experts think this is unlikely.

However, pressure was piled on the Monetary Policy Committee (MPC) by the news yesterday from Halifax, the UK's biggest mortgage lender, that house prices fell for the third month running in November, dropping by 1.1%.

This is the first time in 12 years Halifax has recorded falls in three consecutive months, with the latest sharp drop following falls of 0.5% in October and 0.6% in September.

It said annual price inflation had fallen to 6.3% in November, down from a peak of 11.4% in August, and down from 8.9% in October.

Halifax chief economist Martin Ellis,said the market had slowed as the five interest rate rises between August 2006 and July 2007 had taken effect.

"Higher mortgage repayments and falling real earnings have put pressure on households' income, resulting in a slowdown in both house price growth and activity," he said.

Related Links

Rate This Article

Click on a star to rate this article.

3 ratings

Email a Friend

Let a friend know about this news item with an email containing a link to this page, and a customised message.

 *
 *
 *
 *

 

 *

This helps us prevent automated programs from using and slowing down our services.

About This Author

Nic Cicutti

Site Editor

Rating

Rated 3.5/5 (average from 3 ratings)

Rate this now

Related News

More News...

Hot Topics in our forum

More Hot Topics

Rss Feeds

Email a friend

© Moneysupermarket.com Ltd 2012