Mortgage payers promised a break by lenders

In what might be the first ray of sunshine in an otherwise dark and gloomy property market, mortgage lenders have made an undertaking to pass on further interest rate cuts to their clients.

The pledge, which will be affected when the inter-bank lending rate is dropped, follows an earlier meeting between Chancellor Alistair Darling and mortgage lenders over the effects of the credit crisis.

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This should come as welcome relief for the almost 1.5 million mortgage holders who are facing steep payment rises when their low, fixed-rate home loan deals come to an end in the next couple of months.

While banks and lending institutions are actively looking at ways of helping homeowners in mortgage payment difficulties, the reality is that the number of repossessions is still expected to soar. This is due to the pressures of the rising prices of essential item such as food, clothing, services and petrol, which are stretching UK citizens’ budgets even more.

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