Mortgage market 'entering new dimension'

This week's surprising developments in the UK mortgage market are a sign that the sector is undergoing significant changes, it has been suggested.

Previously the majority of analysis and forecasts were based on the base rate of interest as set by the Bank of England, but with the inter-bank lending rate so high as a result of global financial issues, this could now be changing, according to moneysupermarket.com.

The price comparison website has suggested that conditions may continue to deteriorate for homeowners over the next few weeks and months.

"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," commented moneysupermarket.com head of mortgages Louise Cuming.

"We are facing a market of increasing turmoil and I suspect that Halifax and Abbey are the first of many big providers to announce increases.

"It appears we are entering a new playing field in the mortgage arena, where rates have a life away from Bank of England decisions," Ms Cuming added.

Interest rates themselves are currently at a six-year high, with mortgage rates now at a nine year high according to the Daily Telegraph.


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