Mortgage providers yesterday cautioned that Gordon Brown's proposals for long-term, fixed-rate mortgages could meet a cool reception from consumers as the Prime Minister announced what could potentially be the biggest shake-up in the mortgage market in decades, The Independent reports.
Brown and Alistair Darling, the Chancellor, yesterday unveiled proposals to boost the popularity of long-term, fixed-rate mortgages, which are rare in Britain but commonplace in the US and parts of Europe.
The aim is to make the housing market less vulnerable to interest rate swings and to make housing more affordable.
The Chancellor, who highlighted the approaching problem of "rate shock" for millions of borrowers whose cheap, fixed-rate deals were entered into two years ago and are due to expire shortly, will report by the Budget, next spring, on the proposals.
HIGHER INTEREST RATES significantly slowed down house price growth in June, a leading survey says today, adding to mounting evidence that the housing market is running out of steam.The Guardian
The Royal Institute of Chartered Surveyors' (RICS) monthly snapshot of housing activity found that price inflation halved last month as demand cooled across most of England and Wales.
Although prices rose for the 20th consecutive month, the number of surveyors reporting a rise rather than a fall in house prices was 10.6%, down from 22.5% in May.
This was below the survey's long-run average of 21.6% and the first time the balance dipped below this level since housing activity spiralled upwards at the start of last year.
THE AVAILABILITY OF 'COVENANT-LITE' loans has all but evaporated in Europe as banks turn off the credit tap, reports The Times.
The disappearance of easy credit is believed to have affected the ability of the banks financing the buyout of Alliance Boots by Kohlberg Kravis Roberts (KKR) and Stefano Pessina to sell on the debt.
Over past two weeks covenant-lite loans, beloved by private equity firms for their relaxed borrowing terms, have become almost impossible to acquire for all but AAA-rated borrowers, according to market insiders.
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