Libor changes welcomed for mortgage lending
News Category: Industry News
Published: 11-Jun-2008
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Changes to the Libor could help stabilise the buy-to-let mortgage lending market for struggling landlords, one exert has claimed.
Lender Bradford & Bingley recently announced that the number of landlords unable to meet payments on their loans had risen by 50 per cent in the first four months of this year.
However Darren Cooke, spokesperson for Moneyfacts.co.uk, claims tighter scrutiny of the Libor, the rate at which banks borrow from each other, could introduce some confidence into the market.
He said such a move would "hopefully increase the shelf life of mortgage products from its current 11 days to 30 days, where we were this time last year".
The British Bankers Association (BBA) recently announced a number of changes to the Libor, including a requirement that discrepancies between banks contributions are justified by the individual lenders.
Mr Cook warned: "If this index is not closely monitored and large increases are left to go without investigation, this could create a 'knee jerk' ripple effect by providers on their product pricing which would adversely directly affect consumers."
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