Financial News

• Brown dismisses housing crisis fears (09 04 2008 10:15)
• Mortgage hope offered by bank (09 04 2008 10:15)
• Consumer morale 'falls again' (09 04 2008 10:15)
• Bristol & West withdraws deals (09 04 2008 10:15)
• Retirees feel 'unhappy due to no longer working' (09 04 2008 10:15)
• Severn Trent to be fined £36m (08 04 2008 04:15)
• Brown to announce first time buyers help (08 04 2008 04:15)
• UK bank details 'for sale by thieves' (08 04 2008 04:15)
• Last 100% mortgage to disappear (08 04 2008 04:15)
• High earners 'shut out of market' (08 04 2008 04:15)

Subscribe!

Building societies suffer in 'mortgage famine'

Building societies are cutting back on their mortgage loans deals in the latest stage of the credit crisis, the Daily Mail reports.

Terming the situation a "mortgage famine", the newspaper said that that the member-owned mortgage providers were "no longer…immune" from the crunch.

Lending banks are much more vulnerable to a reduction in the supply of cheap credit on the money markets - as their business models are more likely to favour using the markets as a revenue source.

Small building societies, by contrast, traditionally rely on loans repayments and savings from customers - making them much better protected.

The severe nature of the current credit crunch, however, has led to a host of such societies such as Newbury, Earl Shilton and Tipton & Coseley to raise their loans rates - and even to withdraw products altogether.

Speaking to the newspaper, David Hollingsworth at mortgage broker London & Country advised: "Borrowers with [small] societies who are coming to remortgage should check whether the lender is prepared to offer a reasonable rate before checking the open market."

Send this article to: