Solicitors in Northern Ireland may see fewer clients who are taking out adverse credit mortgages, after lenders have tightened their lending criteria or withdrawn mortgages for those with an impaired credit history altogether.

However, forecasting a five per cent drop in the interest rate by mid-2008, the Council of Mortgage Lenders (CML) asserts that the situation may improve.

This could mean that even Belfast solicitors could see more business from people affected by bad credit, who could not get onto the property ladder without a mortgage, due to overinflated house prices.

Currently the interest rate in Britain and Northern Ireland stands at 5.75 per cent and the next decision due from the monetary policy committee is on December 6th this year.

Sarah Robson, press officer for the CML, confirmed that the credit crunch will make it more difficult for people to get adverse credit mortgages, as lenders are "tightening their criteria".

However, Ms Robson said: "The general expectation at the moment is that there will be a reduction in interest rates next year. That will ease the pressure on some borrowers… It does give some borrowers hope."

"Our October 2008 housing market forecast was for base rates to fall to five per cent by mid 2008."

Solicitors in Northern Ireland will be advising customers that while getting some equity behind them by meeting mortgage repayments could improve their credit rating.

Ms Robson said that if repayments were met by a person with a previously poor credit rating, it's possible they could remortgage to a better deal later on, but warned that the period where their credit rating was poor would still not be erased from their record.

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