Home Owner Loans May Become Harder To Get

The high street Banks said they had cut back on home owner loans in the three months to mid-August and would continue this policy during the third quarter for Secured Loans. They also plan to make their lending criteria even tougher including bigger deposits from borrowers, the Bank of England said in its quarterly credit survey.

However, they expect the cost of mortgages to remain generally unchanged. The grim news for would-be house buyers came as US Treasury Secretary Hank Paulson warned soaring world oil prices risk prolonging the world economic slowdown. He said the rise in energy prices presented a "strong head wind" to global recovery. But he insisted the ‘fundamentals of the US economy were strong and predicted that growth would pick up in America by the end of the year. "I think that the oil prices are a strong head wind and at this level ... they have got a high risk that they are going to prolong the slowdown," he said. Mr Paulson was speaking after talks with Chancellor Alistair Darling on London.