Mortgage Crunch Easing

Observers are hoping that the first signs of the end of the mortgage crunch may have arrived with positive news from lenders regards mortgages. Nationwide Building Society has cut its fixed rate mortgage products by up to 0.3% whilst Abbey has cut up to 0.17% off its fixed rates and 0.05% of tracker mortgages in its ranges.

And after pulling out of mortgages for new customers at the beginning of last month, HSBC-owned First Direct will again start plying for new trade by offering mortgages to new customers.

First Direct stopped accepting new applications after it said it had received 5 times the normal number of applications, but it has now cleared the backlog and is ready to take more new applications, for those with at least a 20% deposit.

But many lenders are still only offering top rates to those able to put down a 20%, or even a 25%, deposit on their purchase.

Louise Cuming, from price comparison site Moneysupermarket.com, said: 'This is welcome news in an otherwise hostile market place. First Direct's original stance - made at the start of April - was reflective of a cautious attitude towards the market as a whole. The reversal of the decision demonstrates a growing confidence in the market.

'The news that First Direct is reopening its doors comes hot on the heels of Abbey and Nationwide cutting mortgage rates last week and HSBC extending its rate matcher offer. The clouds over the mortgage market are starting to clear, much to the relief of borrowers across the country.'