More lenders will increase rates, say National Homebuyers

More mortgage lenders are set to increase their standard variable rate (SVR), potentially plunging many homeowners into financial difficulty.

[UKPRwire, Wed Nov 21 2007] That is according to Ray Boulger from John Charcol, who was responding to last week's announcement from Standard Life.

The firm revealed that it is to increase its SVR by 0.15 percentage points, with Moneyfacts describing the move as "very rare" and pointing out that "it could very well be the first sign that the mainstream 'prime' mortgage is feeling the pinch of the credit crisis".

Speaking on BBC Radio Four's 'Moneybox' programme following the announcement, Mr Boulger said he expected to see more lenders doing the same.

"The problem for banks and building societies is that the cost of their funding in the wholesale market has shot up over the last few months because of the credit crunch," he said.

"So they will now be paying significantly more on average for their funds, and one way they can recoup the cost of that for existing customers is to put up their standard variable rate.

"We may see some more follow," continued the senior technical manager.

Sell house for cash property company National Homebuyers says rate increases will create thousands more repossessions. "People are already struggling to retain affordability in their lives" says director Julian King.

"We are already speaking to hundreds of people each week who are looking for a quick property sale solution as they are in, facing or are predicting financial difficulties.

"We expect there to be a 50 per cent increase in the number of repossessions next year. Those facing such problems should look for a quick house sale fast".

Mr King is a director of National Homebuyers, the UK's leading quick house sale property company.

Recent research from GE Money Home Lending revealed that 87 per cent of mortgage brokers have handled a deal which has been affected by the global credit crunch.

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