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Your Mortgage: US mortgage situation may lower UK confidence

16/07/2008

The USA`s mortgage company situation will have "an indirect effect" on the UK market as confidence may be lowered, an expert has said.

Your Mortgage has commented on the problems faced by US mortgage companies Fanny Mae and Freddie Mac, which between them own or guarantee around half of the outstanding mortgages in the country, amounting to $5.3 trillion (£2.7 trillion).

Shares in the firms dropped by up to 50 per cent last week when they announced billions in losses due to an increase in defaults and possessions in the US housing market.

Those looking at mortgaging or remortgaging may be concerned about the UK market.

However, Pauline McCallion, editor of the independent Your Mortgage website, said a direct effect on the UK market would not be seen but buyers may lack confidence in the market.

"The mortgage markets are so interconnected at the moment so it probably will have an effect indirectly," she said.

Ms McCallion added the two mortgage markets work and are regulated differently. "The central banks in the UK, America and Europe all operate different policies when they deal with different issues," she said.

Your Mortgage offers news and advice on mortgages.

Many debts unaffected by base rate cut 09/01/2009 - Yesterday, many borrowers welcomed the Bank of England’s base rate 1.5% base rate – an historic low 08/01/2009 - Today’s base rate cut by the Bank of England’s Monetary Gas price cuts expected 07/01/2009 - Energy company Scottish Power has announced the launch of a Personal debt about £1.5 trillion 07/01/2009 - The UK’s personal debt stands at around £1.5 trillion, according