Mortgage rate hike worries Britons

LONDON, March 28 (UPI) -- Lenders in Britain are raising rates and tightening restrictions as the pace of new mortgages has fallen by one-third.

Nationwide, the nation's largest building society raised its rates 0.57 of a percentage point to 6.6 percent, the Daily Mail reported Friday.

The increase bumps a monthly payment of $1,900 to $2,100, the report said.

Building societies have no shareholders, so the increase could be a signal that the rest of the country's lenders will follow suit, the report said.

Banks have become reluctant to sign deals, with some placing restrictions on various professions or stipulating the home be a certain distance from the bank's building.

"There is now a fatal combination of people who are unable to borrow and banks who are unwilling to lend," Liberal Democrat treasury spokesman Vince Cable told the Daily Mail.

Analysts said that the lack of mortgages may create a glut on the housing market, which would contribute to falling home values, the report said.

The British Bankers Association said that 43,870 mortgages were meted out in February compared with 65,637 in February 2007.