Could be two years before mortgage freeze is over

According to a recent report it could be a couple of years before the mortgage freeze in the UK starts to melt, which means that there could be further problems ahead for both consumers looking to take out a mortgage and for lenders who could suffer loss of profits through reduced business. The housing market will also continue to suffer as a result due to reduced property sales.

The prediction came from the former chairman of HBOS, who put together a report relating to the issue. Sir James Crosby predicted that the mortgage freeze could go on into 2009 or even 2010. The mortgage industry has been suffering since the onset of the global credit crunch, which made its way to the UK from the US last summer, and has been wreaking havoc in the financial markets ever since.

Crosby has been asked to look into liquidity in the mortgage market by the government, and like most other industry officials has said that whilst the government has recently launched a £50 billion mortgage rescue plan to try and increase liquidity in the market this is likely to take some time to take effect.

Sir James Crosby is set to release his report later on this year along with his recommendation on how the mortgage market can be eased through increasing liquidity in the market.