Homeowners 'affected by the credit crunch'

17 September 2007
Conditions within the credit market are being felt by homeowners as some of the UK's largest lenders choose to put up their mortgage rates, it has been claimed.

Luoise Cuming, head of mortgages at moneysupermarket.com, said that the Bank of England no longer appears to be guiding the mortgage market.

Despite the Bank's monetary policy committee freezing the base rate of interest at 5.75 per cent, some lenders have proceeded to increase rates for their variable mortgage products for new customers, Mr Cuming said.

"Homeowners may have breathed a sigh of relief after last week's hold on base rates, but it is no longer safe to see this as an indication of stability," she remarked.

The impact of the "credit crunch" is now affecting homeowner, she said, predicting that this trend is likely to continue.

Responding to the recent base rate decision, the Royal Institution of Chartered Surveyors claimed that house price growth turned negative in August – the first time it had done so since October 2005.

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