Clive Briault's warning that 1.5 million people due to remortgage next year will find it "difficult, if not impossible to refinance their mortgage on favourable terms" could cause undue panic, according to Newcastle Building Society.
Newcastle’s lending expert, Steven Marks, says most major UK lenders are still looking to do new business and customers will still be able to access competitive deals in 2008.
Earlier this week, Briault, managing director of retail markets at the FSA, warned 2008 would be a tough year for both lenders and borrowers and a lack of liquidity in credit markets was forcing up mortgage rates.
However, Marks thinks the FSA is causing unnecessary alarm and says the market is in reasonably good shape, though times are more difficult than a year ago.
He says: “From this week’s headlines, many people will be forgiven for thinking that they won’t be able to get a mortgage or competitive remortgage deal from their lender next year.
“Yes, these are difficult times and in a more difficult economy lenders have to take extra care to be responsible. But, apart from what is happening with Northern Rock and a small number of specialist lenders, other mainstream lenders are still keen to do business.”
Newcastle Building Society says while rates have been rising for two years they remain at historically low levels. The most recent base rate cut should also help ease borrowers' concerns as they come off their cheaper fixed-rate deals.
The building society says people should not panic and should speak to their lender if they are concerned.
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