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Abbey Lose The Mortgage Habit

After offering hope to the struggling mortgage market only last week it seems that the credit crunch may not be over and there may be worse to come. Hot on the heels of the Banking Association’s report, which sowed that more and more people were falling behind with their mortgage, Abbey has increased the rate on their fixed rate mortgage offers.



After reducing some rates by 0.17% just last week, a move which many thought had marked the end of recent troubles, Abbey has increased rates by up to 0.56% this week. The move is a sharp reminder that the current market conditions are proving very difficult to understand and predict. Just last week there were signs that the wholesale money markets were moving back towards some kind of normality but these hopes have now been dashed.



There are now fears that Halifax and Nationwide will also follow the lead of the Abbey after reducing some of their own headline rates last week. There are genuine fears that the UK property market is only now approaching a similar situation to that which caused the US market to crash. The government have already played their joker with the £50 billion asset swap program and there are concerns about what else they can do in the short term.

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