LONDON, July 1 (UPI) -- The Bank of England warned Thursday that mortgages would become more difficult to find as economic conditions had become restrictive.
Banks were becoming increasingly wary of borrowers' ability to make loan payments, and cash for loans was becoming harder for banks to find, the bank said.
Adam Posen, a monetary policy decision-maker with the central bank, said, "The U.K. economy is potentially switching between two states, a recovery, which we are now in, albeit perhaps a weak one … and the renewal of a severe recession if not outright deflation," The Daily Telegraph reported.
Melanie Bien, director of Private Finance, a mortgage brokers, said, "The bank is warning that we could face a second credit crunch. For those borrowers who are already struggling to secure mortgage finance, this is nothing short of disaster."
Chief Economist Simon Rubinsohn at the Royal Institution of Chartered Surveyors said, "The likelihood is that the finance for the property market will continue to be in short supply for some time to come."
