London, England (PRWEB) June 27, 2008
Premier Club the travel, leisure and entertainment discount programme offering great savings on everything from hotels to restaurants in the United Kingdom as well as selected countries in Europe; has issued the following statement regarding the credit crunch that is gripping the nation.
Premier Club is advising the general public to brace themselves as the credit crunch is starting to take affect here in the UK. What initially started in the US with the banks having to foreclose on sub prime mortgages has had a knock-on effect on the world money markets. These tough conditions have hit well known high street banks, who have reported falling profits in the first quarter of this year as trading in March pulled profits lower than in the previous year. The bank reports, that it was still profitable; however the current global situation is still cause for concern as it would appear that the credit crunch is making it increasingly difficult for banks to raise money (news.bbc.co.uk/1/hi/business/7364260.stm)
The Prime Minster is standing firm on the economy and says that he will not be diverted from making 'the right long-term decisions for the UK's economy even if they are unpopular in the short term' (news.bbc.co.uk 29/05/08) Thus far, the Bank of England has poured £50bn into the banking system in an effort to make the financial markets more fluid. However, insecurities still remain as the Royal Institute of Chartered Surveyors reported that its members had their gloomiest predictions for the housing market since it survey began in 1978 (news.bbc.co.uk/1/hi/uk_politics/7347330.stm)
During the last few months the British Banker Association has revealed that mortgage approvals for homes in the UK have fallen considerably. April 2008 figures were in fact the lowest ever recorded in recent times just 35,417. (guardian.co.uk/money/2008/apr/23/mortgages.property2)
The Credit Crunch has been hitting the UK mortgage sector hard and as a result many mortgage deals have been removed from the high street in recent weeks.
Despite the Bank of England trying to increase liquidity of mortgages in the UK, the economy would still appear to be suffering. These efforts do not really seem to address the real issues of illiquid mortgages related bonds. There are also concerns regarding UK housing market slumping on the back of foreclosures. This basically means mortgage related bonds are still difficult to convert to cash, leading to a likely increase in the number of repossessions in the UK.
Currently in the UK, the rate of repossession continues to soar and is forecasted to total as much as 34,000 by year end. This figure is double that of the figure reported in 2006 (17,000 homes).
At the start of 2008 the number of repossessions was fast approaching that of the last housing bust in the early 1990's.
Mortgage banks such as Northern Rock are being hardest hit and reported doubling rates of repossessions.
Premier Club (clubprem.com) recognises that the impact of this will mean even tighter borrowing requirements for those wishing to take out a loan or mortgage.
Everyday, people will begin to feel the pinch as a similar squeeze on house prices led by the collapses of some sub prime mortgage lenders across the waters ensues.
Premier Club advises that the public should air on the side of caution and tighten their belts where possible. Remember that Premier Club is a discount programme that saves its members money on travel leisure and entertainment.