More Gloom - dont Banks realise to get out of the problems they are in they need to lend money. If they dont lend money otherwise prices will fall and send investors/homeowners to the wall and the risk of default sky high.
Basic Economics
The BoE reported today that mortgage approvals fell to 36,000 in June from 41,000 in May, a third of the level a year ago and the lowest since comparable data were first published in 1993, according to the FT. “In June, mortgage lenders extended £3.1bn net new mortgage credit to households. This level of net lending was half the rate in the previous six months and brought the annual growth in net mortgage lending down to 7.5 per cent from 8.2 per cent in May. Net mortgage lending had been growing at double-digit annual rates for the whole period between December 2001 and December 2007.” Rates are not coming down proportionately to the key benchmark rates.
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