span cash – in total; requests for £25
class="cap">T he billion were received!
credit crunch is affecting
This is on top of two welcome
how ordinary people get cuts in interest rates recently.
mortgages, forcing them to In February and December last
continue to rent property. year the rates were reduced, to
That's a conclusion that can be the current rate of 5.25 per
drawn from two separate pieces of cent.
research which have been
So how exactly has this
published this week. All in all affected mortgages, forcing more
it seems to show that the people to rent property?
problems which started in
Well, all this action by the
American banks and affected Bank unfortunately doesn't seem
Northern Rock last year, are now to have made a difference. It
trickling down to the ordinary follows what's been seen as
person.
inaction by the government and
The first piece of research concerns in the property market
was released by mortgage broker have continued.
John Charcol. Its analysts found
The banks have agreed not to
that the cost of borrowing has lend to each other until these
continued to rise. And that's problems get better. That's
despite attempts from the Bank of affected the availability of
England to ease concerns about mortgages, meaning of course
the credit problem.
those who rent property have
Last week the Bank offered a struggled to get one.
staggering £5 billion in loans to
The mortgage broker speculates
the money markets, to try and that the pretty average recent
stop all the worries about budget combined with problems on
liquidity. The banks were pretty the stock market has acted
keen to get their hands on the against the Bank's actions.
Of late, it's been pretty Leicester.
tough for people who rent
Its analysts found that of the
property to find a mortgage. The top 250 mortgages available on
credit crunch has left few the market, only 68 are offered
lenders willing to take on high by the top ten lenders. That's
risk mortgages. These can include about 27 per cent. The website
first-time buyers who may not says that's surprising, as these
have a deposit, or may on paper lenders took 75% of the market
be a bad credit risk due to their two years ago.
lack of previous ownership.
26 of the most competitive
Charcol advises that the best deals on the market are offered
thing for someone who's seen by the Royal Bank of Scotland.
their ideal home in a property That's well ahead of any of the
shop is to put down a bigger other ten largest banks. HSBC
deposit, to reduce their risk in also performed well with 13
the eyes of the banks. Ten per products in the top 250, and
cent of the purchase price is First Direct had five
suggested to be a good level.
mortgages.
The other piece of research
In a separate story that
that's come out in the last few affects people with mortgages
days and has affected those who more than those who currently
currently rent property is about rent property, Citizens Advice is
mortgage rates offered by the big reporting a huge increase in the
banks.
number of people seeking help
MoneyFacts found that the big with mortgage arrears in the
banks offer few of the best first two months of the year.
rates. They include the Halifax
It said the number of people
Bank of Scotland, Lloyds TSB, asking for help went up 35%. The
Barclays, Northern Rock, Abbey, pressure from rising utility
Nationwide and the Alliance & bills and council tax charges
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Article Tags: bank, mortgages, people
