Mortgages 'to be harder to get in long run'

A member of the Bank of England's monetary policy committee has warned that the mortgage market will not fully return to the state it was in before the credit crunch.

Discussing the effect of the credit crunch on the mortgage market, economist Charlie Bean suggested that the comparatively easy credit which had been available to mortgage borrowers before the crisis will not return, stating: "It is important to recognise that some of these changes will persist beyond the resolution of the current hiatus in mortgage markets."

Instead, he predicted, there will be more cautious lending and higher deposits than used to be the case.

Such a situation may make home moving home more expensive than it would otherwise be, prompting some to seek to renovate their properties to meet their changing housing requirements.

In related news, the future policy of the Bank of England towards issues such as mortgage rates is to be examined by a committee of MPs, the Treasury has announced.

The Treasury committee will grill the Bank's governor Mervyn King over his thoughts on April 29th, ahead of his formal reappointment for a second term in office at the end of June.


© Adfero Ltd