Mortgage Market in the UK is impacted by US bank collapse
The mortgage market could again be troubled by recent mortgage news from within the United States. Lehman Brothers the large US Bank faced horrific news recently with its collapse and is set to now effect UK homeowners.
The world’s financial markets have been pretty much up in the air recently with the take over of Merrill Lynch investment bank and the announcement of Lehman Brothers bankruptcy submission, thus leaving nearly 5000 UK staff without a job.
With international factors affecting the UK market the case on the country’s recession issues becomes much more evident. According to analyst Michelle Slade from moneyfacts.co.uk who commented on the impact on the UK mortgage market said “At the end of last week, rumours over Lehman Brothers caused the cost of borrowing on the money markets to increase. Now that it has been confirmed, the cost will likely increase further as once again the banks may become wary about lending to each other.
The increase in borrowing for the banks will likely be passed on to the consumer through higher mortgage rates. The longer the banks face an increased cost of borrowing, the more likely it is that UK mortgage customers will be hit. It takes around two weeks for any increase to filter through to mortgage rates.”
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