The global credit squezze is making both lenders and brokers be worried about market´s future, therefore appetite for new mortgage lending is being reduced.
Ray Boulger, technical director at mortgage brokers Charcol, says that the new business market has been about 20% down in September and October.
One of the consequence is going to be job losses. Many mortgage lenders are announcing they would reduce its workforce by cutting posts. "Bank of America to cut 3000 Jobs After Trading Loss" was one of Bloomberg´s breaking news today.http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ7Eg4rVeGJ4&refer=home
There is uncertainty too for the 6500 staff employed at Northern Rock. It is unlikely that any potential owner will want to write the same volume of mortgage lending in the future.
On the other hand, falling house prices is another worry added. In fact, house prices are falling for first time in two years, according to the Royal Institution of Chartered Surveyors.http://www.thisismoney.co.uk/mortgages/house-prices/article.html?in_article_id=424291&in_page_id=57
It is likely the economy will suffer a dramatically slow consumer spending as a concequence and this could be the start of a recession.
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