Are we on the verge of a mortgage liquidity crisis?
There are growing concerns that competition in the UK mortgage market may well have peaked in the short-term and remortgaging could become more difficult in the latter part of 2010. Slowly but surely we appear to be slipping back towards a liquidity crisis in the mortgage market which has been brought on by the debt crisis in Europe, the UK economic situation and the UK governments move to reduce the public-sector budget and increase taxes. So are we on the verge of a mortgage liquidity crisis?
While suggesting we are on the verge of a mortgage liquidity crisis may seem a little emotive there is no doubt that the UK mortgage market has yet to reach liquidity levels required for a smooth fluid property sector. As a consequence we appear to be hitting peaks and troughs on a regular basis and confidence in the sector has been shaken. The very fact that the Bank of England earlier this week suggested there would be reduce mortgages available in the UK in the months ahead has further compounded the problem.
Another issue is the fact that mortgage companies in the UK will now be on their guard and we could see something of a self-fulfilling prophecy as mortgage lenders look to reduce their risks and reduce any future liabilities.
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