Credit crunch 'might reduce number of mortgages available'
Published On 23 September 2007
While the ongoing credit crunch has not affected first-time buyers any more than other people looking for mortgages, they have suffered from affordability problems for some time already, an industry expert has warned.Bernard Clarke of the Council of Mortgage Lenders (CML) said that the ongoing tightening of credit in the UK and US had not made it "significantly more difficult for first-time buyers".
However, he added: "First-time buyers have had affordability problems for a considerable period of time. Those have been driven by the rise of property prices relative to incomes, and that's much more significant for affordability."
In addition, Mr Clarke said that the long-term effect of the recent volatility could be that there are "some restrictions in the range of products available and some effect on the supply of mortgages in the market place".
But he acknowledged that this would impact everybody looking for a new mortgage and not only first-time buyers.
Recently, moneysupermarket.com reported that a number of major lenders - including Abbey and Halifax - had increased their mortgage rates, despite the Bank of England's decision not to increase interest rates in September.
