Homeowners must plan ahead for 2008

Yesterday's (January 3rd) figures revealing worsening credit conditions make it even more imperative for homeowners to plan ahead in 2008, according to a leading mortgage industry association.

Data released by the Bank of England indicated that the availability of secure credit had fallen and the Council of Mortgage Lenders has claimed that the figures were further proof of a slowdown in the mortgage market.

However, Bob Pannell, the association's head of research, argued that the situation would soon lead to interest rate cuts, particularly with the current low level of inflation.

And he re-emphasised the importance of those homeowners who are coming to the end of their fixed term mortgages this year needing to plan ahead to prepare for possible higher repayments brought about by the new lending constraints.

"This survey corroborates other evidence of worsening market sentiment. This may increase the chances of interest rate cuts sooner rather than later if inflationremains subdued," Mr Pannell said.

"Borrowers should make a New Year resolution to review their finances and plan ahead if they are coming off fixed rate deals later this year."

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