Insurance News Archive

B and B crisis will take property prices 'down even further'

The nationalisation of struggling bank Bradford and Bingley (B and B) will have an impact on mortgages and will affect prices even further than they have been so far, it has been suggested.

Property Wire said lending in the property market will be more limited by the events.

Ray Boulger, senior technical manager at mortgage broker John Charcol, told the website people will "struggle" to stretch to lending criteria.

"With rental cover now expected to be between 110 to 120 per cent of mortgage payments a lot of people are going to struggle to re-finance and will have to take their current lender's default rate," he explained.

He also pointed out no companies are now lending 85 per cent or above.

Savills Private Finance recently said following the collapse of the Lehman Brothers, the bailout of insurer AIG and the takeover of HBOS by Lloyds TSB have generally "shaken confidence in the financial markets".

30 Sep 2008