Bank bailout ‘will not aid all of mortgage market’

9 October 2008

Experts believe that the new £50bn British bank bailout may not help first-time buyers, as lenders look to fill their balance sheets with “lower-risk” customers, it has emerged.

Speaking to The Telegraph, Ray Boulger at mortgage experts John Charcol said: “At least banks will have access to funding, but they will want to have lower-risk customers on their balance sheets – and this means buyers with sizeable deposits.”

Some commentators believe that Thursday’s expected cut in the Bank of England’s base rate will not be passed on to all customers, according to The Telegraph. Homeowners on a tracker mortgage will automatically benefit, but those paying their lender’s SVR (Standard Variable Rate) will have to wait and see how their lender reacts. A spokesperson for Think Money said: “Last time the base rate was lowered, few lenders immediately followed suit with their own mortgage rates, due to the uncertainty in the market at the time – and it is possible that it will be the same this time around.

“Mortgages are still very much available and will continue to be, but only tracker mortgages are guaranteed to show the benefits of a base rate cut.”

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