UK Money News
8th May 2008
High-cost mortgages are here to stay, warns BSA
Homeowners have been warned that mortgages will remain expensive for at least another two years.
Since the onset of the credit crunch UK mortgage providers have withdrawn their most competitive deals and have raised repayment rates on existing products despite cuts to the key base rate of interest.
Speaking on Radio 4's Today programme, Ian Cornish, chairman of the Building Societies Association (BSA), said that with the crunch poised to last another two years lenders should not expect any relief from high mortgage repayments until at least this time.
He commented: "We have seen a seismic shift in wholesale markets. That is obviously now starting to spill over into the wider economy with some slowing down.
"I don't see things getting any worse from here but I do expect it will take 18 months to two years for confidence to return fully and work its way through the system."
Mr Cornish has also predicted that a fundamental change in the way that credit markets operate will result once the crunch begins to abate.
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