Credit Crunch

cm233lh

Any views on how recent events in the financial markets are likely to affect the mortgage market? Are we going to see cheap deals drying up if the banks can't get hold of money to fund them, or will it take more than this to affect the retail market?

ctabuk

You always imagine that Banks have vaults full of our cash -but money comes in and out of currency as Ronald Biggs could testify:rolleyes: . The Banks and Building Societies buy their money on the International Money Markets - Houses like Tullet and Tokyo -what has been happening is the effect of hyper inflation on House prices -Prices are outstripping the Lenders reserves. In the States adverse credit lenders like Lehman Bros, Bear Sterns have been putting out warnings that they and some other lenders had buyers who were defaulting on loans and that repossessions were in place. Well if there are not enough first time buyers to buy these properties they go to auction. The Buy to Let market will probably do well.

Personally - I think we will see House prices start to fall. Restrictions on borrowing will take place. Probably not a Mortgage famine as happened in 1975. But the signs are that we are in for a lean time. Expect aquisitions and mergers. Certain markets will do well - Shared Ownership - Buy to Let but others - well -hold on to your hats -It may get bumpy