24 October 2008
More than two weeks after the Bank of England cut base rates by 0.5%, mortgage lenders are slowly beginning to pass on the reduction to their consumers. According to the Times, Royal Bank of Scotland and Abbey have both cut interest rates on some of their fixed rate deals, bringing relief to overstretched homeowners. Credit conditions remain tight and lenders are still demanding large deposits from new buyers, but the reductions may signal a shift in the sector. Indeed, those seeking secured loans may soon be able to find cheaper deals if other lenders follow suit and slash their borrowing costs. According to the Bank of England's latest credit conditions survey, the third quarter of this year saw a larger-than-expected reduction in the availability of secured credit to households. The report stated that expectations of falling house prices coupled with wider concerns about the UK economy were a contributing factor.
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