As reported in the Financial Times and the Times, the mortgage market paralysis will last for at least another three years. A government-commissioned report conceded that it will take years rather months for banks and building societies to adjust to the new reality. Sir James Crosby, the former chairman of HBOS, said lenders’ capacity to make new mortgage advances was ‘severely constrained. An improvement in the mortgage market would be best achieved by issuance of wholesale mortgage-backed securities, but Sir James found no quick fix to solve market problems.
Elsewhere, the Daily Mail looked at HSBC’s new mortgage rates; notably the new fee-free lifetime tracker, at 0.99 percentage points above base rate. The lender has also got new two, three, five and ten-year fixed rates. The Times reported that Abbey overtook Halifax as Britain’s biggest lender of new mortgages, selling more than one in four in the first half of this year.
Finally, the Daily Express reported that mortgage interest rates are finally getting cheaper, as Halifax, Lloyds TSB and Nationwide all lowered some of their fixed and tracker rates this week. However, while rates are coming down, criteria are not being relaxed and it is still those with sizeable deposits or equity in their home who benefit from the best deals.