Problems continue with mortgage sector state CML

The Council of Mortgage Lenders has recently expressed concern over the huge problems that are affecting the mortgage market in the UK, adding that the problem are likely to continue dogging the market unless the Bank of England takes action and intervenes to try and ease the problems.

One of the major effects of the global credit crunch is that lenders are finding it far more difficult to get finance on the wholesale markets, and inter-bank lending has become increasingly expensive, which means that lenders’ funds are drying up and they cannot meet demand when it comes to making loans.

An official from the CML said: “We have entered a substantially slower phase in the housing market and there will be ongoing problems in the mortgage funding markets unless the Bank of England makes new, broader based attempts to improve levels of liquidity in the UK. Demand for mortgages remains strong but cannot be fully met from existing funding.”

He also added: “As credit conditions change markedly from day to day, lenders will continue to rapidly adapt their products and pricing to match. This is a vital response to the uncertain conditions.”