Credit crunch affects building societies

According to recent report the global credit crunch that has swept across the UK is starting to take its toll on building societies as well as on banks and other lenders.

It was originally thought that building societies had escaped the effects of the credit crunch, as most funded their mortgage lending through savers’ deposits.

However, in recent reports a number of building societies have reported that they have had to withdraw carious mortgage products from the market, tighten up on lending criteria, and restrict new lending as a result of the credit crunch.

The situation regarding the availability of mortgage is set to get worse over the course of this year.

Officials from building societies have stated that they cannot keep up with demand for mortgages from consumers that have been turned down by banks or feel that they will be turned down by banks.

This has seriously hampered the chances of those hoping to get the finance that they need from a building society.

Banks have had to cope with extreme difficulties and expense when it comes to securing finance to fund their mortgage operations, and this has affected accessibility and affordability when it comes to mortgages.