The panic over the economy is spreading. As reported here on Spotlight by Mike Clarke on Sunday in his post “UK Banks Panic Over Buy-To-Let Loan Boom!”
Major lenders have hiked their tracker rates and arrangement fees over the past week
Banks and building societies’ own funding costs are to blame as London Inter-Bank Offered Rates (Libor), the rates at which lenders lend to one another, hit levels not seen in over two years.
In part, Libor reflect the confidence that lenders have in one another, and the sovereign debt storm in the Eurozone has been pushing rates up over the past six weeks.
With the crisis ongoing, the rises in tracker rates and arrangement fees seen so far could mark the start of a trend, and good mortgage brokers are advising homeowners to review their borrowing arrangements, especially as attractive five-year fixed rates are still to be had.
The Confederation of British Industry (CBI) is also calling on the Government to ease the plight of would-be first-time buyers.
CBI Director General, John Cridland has previously stated that UK housing market activity is a “game-changer” for economic growth and wants first-time buyers to be able to access savings locked in their personal pension pots, through loan-back schemes.
This would allow members of company pension schemes to borrow money for a house purchase from their own pension pot at a low cost, paying the loan back through their salary at any time during their working life.
According to the Council of Mortgage Lenders, (CML), only 36,200 first-time buyers bought homes in the first quarter of 2011 compared to 43,600 in the same period of 2010.
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