'No immediate concern' for UK mortgages

Despite the fact that rates have been going up for many borrowers looking for self certified mortgages and other products, Moneyfacts.co.uk has claimed that there is no need for panic in the market just yet.

There has been speculation that the mortgage market could be headed for a similar crisis to that seen in the US sub-prime sector, but the price comparison site said that increases in lenders' rates are not necessarily a sign of trouble.

Julie Harris, mortgage expert at Moneyfacts.co.uk, said it is quite usual for mortgage rates to move during periods of base rate stability.

There are a number of reasons for this, such as a strategy on the lender's part to increase or decrease the market share.

"They [lenders] may have been predicting base rate rising to six per cent before now and factored this into their pricing plans," Ms Harris explained.

"These charges should not spark fear that the sub-prime crisis has hit the UK prime market. It's causing unnecessary worry, which can only make the situation worse."

Summing up the situation regarding self certified mortgages and all other types of home loan, Ms Harris said that there is no cause for worry as long as certain circumstances are in place.

"If the provider remains liquid, the UK housing market stable and arrears low, there is no immediate concern," she said.

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