Mortgages crisis in 2008
Mortgage lending is possible to cut edge in 2008. Looking through last month’s figures, the sub-prime mortgage crisis has created a brunt on British banks, mainly Northern Rock.
Only last week, The International Monetary Fund notified that increasing oil prices and the turmoil in the economic sector caused by the credit crunch could carry a ‘huge reduction in international trade’.
The Bank of England set a warning forward of a sprawl in new mortgages, through 103,000 in September to 89,000 in October. Mervyn King, the bank’s governor, pointed to MPs on the Treasury select committee that applying for a mortgage could turn into a difficult task, especially with lenders being constrained in their capability to bring forward a mortgage together.
The Council of Mortgage Lenders warned of a short excess of money accessible to support mortgage markets. Nationwide later announced that house prices dropped last month at the fastest pace since 1995.
All have agreed that as a result of the credit crisis, major banks will not lend to one another, which has caused mortgage costs to peak for everyone.
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