Mortgage rates for Lloyds TSB, C&G; and Halifax have been reduced by up to 0.38 per cent. Lenders are also beginning to reduce mortgage arrangement fees that were introduced as a result of the credit crunch as lenders were forced to tighten their lending criteria.

Fees on HSBC mortgages have fallen from £799 to £599, with a maximum loan to value (LTV) of 90 per cent, making the market more accessible to first time buyers who have been struggling since the start of the crisis last August.

Northern Rock was one of the first lenders to fall victim to the credit crisis earlier this year, making other lenders less willing to take risks. The lender today announced a loss of more than £580million for the first half of 2008, news that has come as a shock, despite its already hammered reputation.

As with most lenders, Northern Rock’s downfall was its mortgage lending, which accounted for £1,882million in the first six months of 2008. And, as the cost of living increased, the lender has been experiencing an increase in mortgage arrears from its borrowers. Its statement said:

“The Company no longer applies any discretion to capitalise amounts in arrears when the borrower has made less than three monthly payments. These revised procedures have contributed to the increase in arrears reported in the first six months of the year.”

Hopefully, the changes made to mortgage rates, fees and LTV’s will start filtering down to consumers who need it most, as charity Shelter, has discovered huge numbers are in danger of losing their homes. According to the research, the Council of Mortgage Lenders (CML) predicts that the number of repossessions could soar to 45,000 by the end of this year if something is not done.

Consequently, Shelter is proposing ways to relieve the pressure of the extortionate housing market with its ‘Breaking point’ campaign. Its research found that, as the market stands, 400,000 households are falling behind with their rent and mortgage payments, putting them at risk.

Other households are getting by through debts, as Shelter found that 2.8million households have had to borrow money to meet their housing costs over the past twelve months and 4.1 million households have been forced to use credit cards to cover their mortgage and rent costs during that time.

Adam Sampson, chief executive of Shelter, said: “With repossessions soaring, private sector rents rising, thousands stuck on the council housing waiting list and hundreds of homeless households trapped in temporary accommodation, it seems everyone is feeling the effect of the current housing crisis.”

© Fair Investment Company Ltd