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"Credit conditions to get tougher"

By admin | January 5th, 2008 | General

A recent report based on a PricewaterhouseCoopers study has indicated that although credit conditions have been bad for the latter part of this year in the UK, largely due to the credit crunch that swept across the Atlantic from the United States, things are set to get worse over the coming year. Officials state that lenders will continue to tighten up on lending and credit conditions are set to get worse in 2008, making life increasingly difficult for many consumers.

The report looks at credit conditions and forecasts in various areas of the finance market for 2008, and this includes looking at the problems that will face those due to come off cheap fixed rate mortgages in the next few months, who face a huge leap in interest rates and repayments. Although interest rates have come down this month, and further cuts are expected next year, many consumers on cheap fixed rate deals could still face a huge rise in repayments.

Prior to the Christmas pre-credit application rush one official involved in the study had stated: “There are tough times ahead for both consumers and credit card companies. Banks are continuing to take action in response to the rise in consumer debt by tightening their credit acceptance policies. Many consumers will find it increasingly difficult to obtain credit in the run-up to Christmas.”

Lenders in all areas of the finance sector have tightened up on lending since August, when the credit crunch hit the UK, and many people – particularly those with damaged credit – could now find it very difficult to get the credit they need until the turmoil in the financial markets calms down.

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