Mortgage lending has reached its lowest point in three decades, according to the Council of Mortgage Lenders Q1 figures.

Cutting the Bank of England Base rate could help to ease the current problems in the property market, but such a move may be a double-edged sword, according to John Charcol's Katie Tucker.

She said: "The Bank of England is now in a catch 22 situation: leave the Bank rate where it is and the mortgage lenders, who are sorely needed to keep the property market healthy, are unable to source cheap enough funds to lend out at affordable rates; cut Bank rate and inflation rockets."

The Bank of England has forecast that inflation will increase beyond its target of two per cent by at least one per cent well into 2009.

In related news, a good credit rating could lead to an individual being more likely to get a home equity loan as the credit crunch is making it more difficult for consumers to an unsecured personal loan, moneysupermarket.com advised at the beginning of the year.
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