Low Income Borrowers Pushed to Higher Rates

• Business for lenders who specialise in lending to low income groups has increased as many high Street banks make it more difficult to borrow. About 7 million people in the U.K. have difficulties obtaining mainstream credit, according to the British Financial Services Authority.
• However, many Mortgage Lenders are reporting difficulties in borrowing enough money in the money markets to finance the demand for mortgages. The CML said that there was £24 billion worth of mortgages in February. This is 7% lower compared with the previous month and 6% down on the previous year.
• There are also problems in the buy to let sector. With some investors reporting increased difficulties in attracting suffient rents to pay for the cost of mortgages. This article in the Guardian highlights one of the former boom areas which has now switched to bust
  

Mortgage repossession orders in Manchester rose 11% to 1,035 last year and nationwide repossession orders exceeded 95,000, a level not seen since 1993. Knight Frank estate agents estimates there has been a 15%-20% “correction” in Manchester house prices in the last six months.

• The Fed has many difficult choices to face. Despite its valient efforts to bail out the financial sector there are many who worry that another bail out only stores up more problems for the future. - The problem with bailing out finance sector