Nine building societies downgraded

Nine UK building societies have had their credit ratings downgraded by agency Fitch as falling house prices and the worsening economy are ‘likely to hit profits’. Fitch said that it was particularly concerned with the large exposure of building societies to sub-prime mortgages, buy-to-let loans and high loan-to-value deals. The ratings of a society indicate the likelihood of it defaulting on its loan, while a lower rating makes it more expensive for that organisation to raise funds. A Building Societies Association spokesperson said that the downgrades would not necessarily lead to mergers.