Credit Offers Limited

News that the credit crisis will continue to reduce the options available has just been released. The continuing downturn in mortgage options is going to last for at least the next three months according to economists and analysts. There are many causes to the crisis according to Unicredit Global Market; however there are two really important causes that should be looked into.

First Monetary Policy in which the interest rates were too low for too loan has had a significant impact on the mortgage market. Secondly bad regulation of the mortgage industry has led to its downfall. There have been bad banking policies according to analysts that have shown up in the last eight months. These policies have in essence sparked the issues that are currently happening to a lot of individuals.

For many the problem has been in real estate. Real estate is the driver for the causes we discussed above. The driver is going to tell a person how long the situation will last and how we got to be in such bad shape. Munchau is an economist who has been looking at the different issues. He believes that most of the issues will affect the UK, US, and Spanish properties the most. In fact he sees a 30 to 50 percent peak to trough fall. In other words the housing prices, prices to rent, price to mortgage, and price to income ratio is all going to be affected for the worse. The prices are going to be too much for the average consumer to handle regarding these topics.

There is also a slow down with the non dom fee and bonuses. Things like the 2 year fixed rate mortgage offer will be leaving the scene. Many of the lenders have realised that they can’t offer certain products to the consumers because they are losing too much already so the advertisements to entice you to buy a home and obtain a mortgage will lessen for the superb deals.

At the moment 1000 or less mortgages have been removed from the market. These mortgages have just disappeared as if over night. There are still more than 5000 mortgages available, but they are beginning to disappear as well. The Bank of England is not even trying to cover up the truth. The credit crunch has been intensifying in the last few months and many lenders are demanding at least 10 percent down on a mortgage. For London home buyers this means you need to have around 25,000 pounds in order to by a home. The worst part is most of the consumers looking for mortgages don’t even have a 1 percent savings in order to buy a home. HBOS has seen a 30 percent fall in housing transactions because of this. Employment levels have also been affected. In fact a record level of city jobs have been lost.

Marco Annunziata is an economist as well. According to Marco there will be a mild recession for the US because of the sluggish growth that is happening. He believes that there will be another rate drop for the US interest rates to where it will be 1.75% for the banks. The crisis with in the market is not going to be fixed as long as there is an instability in the housing market. If the market can turn around and stabilize there could be some interesting effects on the dollar and the finance market as a whole.

For the UK market the outlook is bleak. Many believe that the remortgage deals drying up, consumer debt with credit cards and personal loans all speak about a problem that will be akin to the US crunch.

On the other side of things Germany is in an upturn, France is in a holding pattern, and Spain and Italy are also heading for trouble. The facts seem to suggest that with the US housing subprime crisis the rest of the world is being affected. Many banks have lost on investments and their economies are turning so that their consumers can’t afford to spend any money. Europe is in a state of inflation, which makes it difficult to cut rates. There was talk about cutting the 3.5 percent rate back, but it seems the market can’t handle such a cut. The Euro is beginning to weaken against the already weak dollar and it could be that the Euro will be at 1.40 when this year ends.

The financial sector is also going to shrink. Hedge funds and private equity will be reduces and several of the smaller players in the business are going to close their doors. The market is considered to be in the “bear” stage right now. In the US we have already seen big players in the market falter, so seeing the little guys go out of business will not be a surprise.

Back To Financial News April 2008
Travel Rewards With Your Credit Card
APS and Prepaid Gold MasterCard
The Figures On Credit Card Balance Transfers
Pointers for Balance Transfers
Credit Card Interest
Credit Offers Limited
Executive’s Life Ruined by ID Theft
Getting Around Life’s Obstacles
How To Borrow A Grand
Paying for a Good Credit Rating
UK Debt and the Mortgage Industry
Abuse of Government Credit Cards
Asian Growth Helps UK
Banks Raising Funds Offers Hope
Darling and UK Banks Going Head to Head
Estate Agents and Card Fraud
Government to Help UK Banks
Insuring UK Gardens
Interest Rates Rising with Underhanded Techniques
Lost Luggage Insurance Removed
Overdraft Charges Increase Credit Card Balances
Prediction: 10 Percent Drop in Insurance Market
Rise in the Housing Market Prices
The Scams With Telephone Calls and Security Codes
UK Insurance Costs Rising