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A handful of mortgage lenders are being inundated with applications as competitive deals become increasingly rare.

Mortgage comparison website mform.co.uk said up to six out of 10 applications from both home movers and people remortgaging made through its site had been to just three lenders during the past month.

The group said between March 15 and April 18 up to 60% of all mortgage applications it handled were for home loans with The Principality, West Bromwich Building Society and the Co-operative Bank.

It added that just 17 out of 90 lenders dominated applications through its service during the past month, but before the credit crunch struck more than half of lenders had deals that could be considered to be competitive, attracting a significant amount of business.

The group said HSBC had seen a surge in applications, particularly since it launched an offer under which it will match rates for people coming off fixed-rate mortgages, as had First Direct, which stopped writing mortgages for new customers on April 1 after being inundated with applications.

Other lenders that have featured prominently in applications being lodged include Halifax and Norwich & Peterborough Building Society.

The group said the recent market turmoil, which has seen lenders hike their rates and pull products that are attracting too much business, is leading to consolidation in the market.

It added that the Co-operative Bank, HSBC, Principality and West Bromwich Building Society featured as the cheapest lender on a true cost basis in 67% of searches done by customers on its site.

The Bank of England said yesterday it will exchange about 50 billion pounds ($100 billion) of government bonds for mortgage securities, mimicking a swap of $200 billion worth of securities by the U.S. Federal Reserve last month. Brown, whose popularity fell the most on record in a newspaper poll published April 13, said “we will make sure there is enough liquidity in the economy to make sure people can buy their own houses.”

While Goodhart says the Bank of England’s plan doesn’t back up that guarantee, it may do enough to take the sting out of any economic slowdown.

Possible Recession

“The credit crunch will still hit the economy, but it might have hurt more if it weren’t for these measures,” said Goodhart, 71, who served on the MPC from 1997 to 2000. “The measures prevent the risk of a possible recession becoming a depression.”

Goodhart is the author of “Goodhart’s Law,” which holds that targeting monetary aggregates as a surrogate for inflation is futile.

U.K. Chancellor of the Exchequer Alistar Darling will meet mortgage executives at 3 p.m. today in London and so far there are few signs of a coordinated effort to slash lending rates. While Abbey National, Britain’s second-largest mortgage lender, said yesterday it’s reducing rates on some adjustable loans, it also raised them for borrowers who make deposits of less than 10 percent.

The number of fresh mortgages approved for house purchase by the big UK banks remained close to a decade-low in January, industry figures revealed yesterday, reinforcing economists’ forecasts of significant falls in house prices this year.

Figures from the British Bankers’ Association showed the number of fresh home-loan approvals in January was down 31% on the same month of 2007 at 44,288.

This was up marginally from the December number of 42,343, but this figure had been the weakest since comparable records began with the formation in September 1997 of the “Major British Banking Groups” constituency following conversion of the larger building societies. The BBA numbers are adjusted for seasonal factors.

U.K. house prices rose in February for the first time in four months after two interest-rate cuts by the Bank of England encouraged sellers to demand more for their homes, Rightmove Plc said.The average asking price climbed 3.2 percent to 237,856 pounds ($466,000) from January, compared with a 0.8 percent decline the previous month, Britain’s most-used property Web site said today. In London, values increased by 0.9 percent.

“With a couple of interest rate drops,” homeowners seeking to sell “are probably thinking the outlook is more positive,” Miles Shipside, commercial director at Rightmove, said in an interview with Bloomberg Television. “They’ve got the whole year to pitch their asking price. It’s not the return of a boom.”

Other reports have shown the property market slumped after the benchmark interest rate reached a six-year high in 2007 and credit costs rose. Bank of England Governor Mervyn King said last week that further price drops are “possible” as economic growth slows and banks curb loans to consumers.

The average time a property spent on the market rose to 93 days from 78 days a year earlier, Rightmove said. Average stocks per real-estate agent increased to 64 from 54 in February 2007.

Consumers could save over £500 a year by switching to a more competitive deal on financial products like loans and insurance.

A study by MoneyExpert.com found that the average household could save an impressive £547 per year by switching to more competitive financial deals.

Almost half of this saving (£204 per year) could be from opting for a better interest rate in an unsecured loan, the study added.

What’s more, the research indicated that only 16 per cent of all households had managed to secure the best possible deal on five important financial products.

“With everyone coming under increasing financial pressure from rising bills it makes sense to find every possible way to cut costs,” commented Sean Gardner, the website’s chief executive.

“Typically, UK consumers are paying out £150 per year more than they need to. I’d urge people to spend just a few minutes online to review their finances.”

Recently, Rachel Lacey, editor of Moneywise personal finance magazine, suggested that consumers could think about using an unsecured personal loan to consolidate existing debts.

More than a million people have taken out loans without telling their family or partner about the debt, Abbey Loans has found.

Some 1.3 million people have got a so-called secret loan, with more than half of them saying they are using the funds to repay other debts.

The news comes after the latest debt statistics by Credit Action found that British borrowers pay some £94.5 billion a year in interest, with the average debt per household standing at £56,234.

Abbey Loans’ survey discovered the typical amount borrowed by secret debtors was £5,720, according to Abbey Loans, with the majority of loans for an amount smaller than £3,000.

However, some people’s secret borrowings are more substantial. Abbey Loans found that there are people with secret loans of as much as £50,000.

Paul Morrish, Abbey Loans director, urged people not to take on debt without discussing their options with friends or family.

“Talking about your financial situation with others can help so that you can be realistic about what is affordable,” he added

That Britain is slipping into a personal debt crisis has been well documented for a number of years now.

The UK’s burgeoning levels of personal debt have, for a long time, far outweighed that of our European neighbours.  Indeed, figures released last year revealed that the average consumer in this county is £3,008 in debt compared to an average figure of £1,558 across the rest of Western Europe.

Alarmingly the UK is now responsible for a third of all unsecured debt in Western Europe. 

It’s a precarious state of affairs borne out by the current figures for personal debt in the UK: The total figure for personal debt in Britain in June 2007 was £1,355bn with the growth rate increasing to 10.1% for the previous 12 months; it would appear that this is not an issue that shows any sign of slowing down.

Including mortgages the average household debt for the UK is £56,000, excluding mortgages the figure is £8,856 and if based on households with some form of unsecured loan the average figure is £20,600.

Every four minutes this country’s personal debt is rising by a million pounds.

In a surprise move, Barclays has cut personal loan rates on many of its products. This follows recent rate rises by other lenders.

Certain loans have experienced rate reductions of as much as 0.6 per cent; the Barclayloan Plus product, available to existing customers, has seen its rates fall from a typical 7.4 per cent APR to 6.8 per cent.

Barclays says that’s it been able to advantage of its strong balance sheet, and finance loans from its ‘very strong deposit taking business.’

The bank has also sought to demonstrate its confidence in the competitiveness of its products. Investors have been assured that if they take out a Barclays loan and then find it cheaper elsewhere, the bank will pay the difference between the monthly repayments, plus an additional £1 per month.

The move comes after a month in which several lenders have raised the interest rates on their personal loans, in reaction to continuing uncertainty in the financial markets.

Moneyfacts.co.uk recently reported that nine lenders raised their interest rates last week alone, with some loans seeing substantial hikes. At Bradford & Bingley, interest on loans between £2,000 and £3,000 went up by four per cent, to 17.9 per cent.

Lisa Taylor, analyst at Moneyfacts.co.uk, explained that such rate rises “probably more closely reflect the current financial market”, with the previous, very low rates being “unsustainable” for the banks.

It’ll be interesting to see if any other high street banks follow Barclays and cut rates themselves.

The number of people being turned down for a personal loan has soared by a third as banks tighten their lending in the wake of the credit crunch.

Nearly two million of those applying for a loan in the past six months have been rejected by banks.

The move is the latest in a series of measures by lenders shaken by the continuing crisis in the financial markets.

Several banks and building societies have already increased their rates on tracker mortgages in a bid to pass on their higher lending costs to customers.

Yesterday, Abbey raised the rates on its first-time buyer tracker mortgages by a substantial 0.45 percentage points to 6.99 per cent, despite the Bank of England’s announcement that it would be keeping interest rates at 5.75 per cent.

Already this week nine lenders have increased the cost of taking out a personal loan by as much as four percentage points.

The latest sign of tougher times is that 1.91 million adults were turned down for an unsecured loan between April and September, according to MoneyExpert, a financial comparison site.

This is a dramatic increase on the 1.39 million who were rejected in the previous six months. Sean Gardner, the chief executive at MoneyExpert, said it was understandable that banks were getting stricter.

He said: “They’ve been stung by bad debts with borrowers unable to repay the cash and are tightening their lending criteria. A combination of the credit crunch and the Bank of England putting up interest rates has hit borrowers’ ability to repay and lenders are reacting.”

Banks fund many personal loans in the wholesale money markets, where the cost of borrowing has soared as a result of the credit crisis.

In an attempt to recoup some of the lost profits, many lenders are also raising their rates to borrowers. Some will have to pay an extra £250 over three years for a £5,000 loan.

There are an estimated 12 million adults with £66 billion worth of personal loans outstanding in the UK — more than twice the amount of debt taken out on credit cards, and six times the amount people have on overdrafts.

Two out of every three people take out a loan to consolidate their debt, according to MoneySupermarket, a financial comparison website.

Tim Moss, its spokesman, said: “Everybody is going to have to tighten their belts and many people will be forced to go to a debt management company if they can’t get a loan.”