Banks reassure customers over loans

Updated 14.32 Wed Sep 26 2007

Keywords: finance, loan, home, mortgage, business

Mortgage lenders insist the availability of loans should not be affected by the problems in global credit markets.

In a survey by the Bank of England, banks and other lenders said the availability of mortgages did not change during the three months to mid-September and the amount of money they were prepared to lend in future will remain almost the same.

The total amount of credit is likely to continue falling until the New Year

They said recent financial market turmoil and changes in the cost and availability of funds suggest the amount of credit available will fall.

The total amount of credit is also likely to continue falling until the New Year.

The lenders also said they expected to use less securitisation, where they sell off bundles of mortgages to investors, to raise funds during the coming three months.

But they said the corporate desire to increase market share will force businesses to make competitive offers.