Borrowing and house prices ‘will keep falling’

The rate of borrowing and the average cost of houses in the UK will continue to fall in weeks and months to come, one expert has asserted.

Vicky Redwood from Capital Economics is convinced that fewer people will be able to access mortgage deals and credit card debt as lenders continue to tighten their criteria.

The rate of mortgage approval has dipped considerably in recent weeks and Ms Redwood maintains that even if home loans do become more readily available fewer people will be keen to take on the associateddebt management burden in light of falling property prices.

She said: “The Bank of England’s special liquidity scheme, if it works, might stop things getting much worse but lenders will remain cautious.”

Last week, a report from Moneyfacts suggested that many of the biggest money lenders in the UK have been increasing the rates of interest they charge their personal loan customers in recent months.