Thursday, Feb 21, 2008
Why did it take so long?
BBC: Northern Rock halts 125% mortgage
"The flagship offer from the bank will be closed from 2000 GMT. The deal lets customers borrow up to 125% of the value of their homes and has been criticised for encouraging people to take on large debts".
Posted by alan @ 04:11 PM (871 views) Add Comment
11 Comments
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1. Jackas said...
"24% of NR's 800,000 mortgages were Together mortgages"
Can someone help me with the maths here? If the average mortgage is for £150,000, then 0.24 x 800000 x 150000 = nearly £30 billion.
That's quite alot of money innit. Isn't that what the government lent them?
Oh dear dear dear.
2. little professor said...
About f'ing time.
3. theboltonfury said...
where's that bell Greenbay? I'd love to hear his views on the collapse of British banking in front of our eyes. Wasn't availability of cheap loans in his Top 10 reasons that things were still on their way up
Should help him increase his portfolio of grot
4. paul said...
Bloody Hurrah!
5. converted lurker said...
erm...95% mortgages with the opportunity to take up to a 30k loan, with the personal loan element now withdrawn. Can't quite see what all the fuss has been about TBH
6. Ohdear said...
how does this help you peasants get out of your bedsits?
7. Chris B said...
The FSA should never have allowed that percentage to be borrowed anyon who takes on that magnitude of debt can't be right in the head ! .
Its about time we got back to good old fashioned banking - that of the 1950's.
8. Bubbles. . . . said...
Hard Rock Granite Hard Labour? .... I dont think so Who has been responsible Blair Gordy Darling Lawson Major arei
ibut naive fools .The more they say the less I think they know about anything.
One thing is crystal clear they all know how to look after themselves and sell the same old Beans to the simple simons again
and again.
Follow the money .Who took the loot and where is it? Who wants no FOI? Fraud on this scale must leave a trail. Conspiracy here we come
9. Matt_the_hat said...
why would any business point out to their customers that they are getting a "bad deal" from them???????
10. planning4acrash said...
Very soon, within the year, we will see the end of 90% mortgages,
11. Jackas said...
@ Oh Dear
Whilst patiently waiting for the invisible hand to correct a bloated property market, I often marvel at the dignity and charm of people like yourself. It's attitudes like yours thats makes me wish house prices could go up forever since you're such a nice person you clearly deserve something for nothing.
To answer you question, seeing as you clearly need help understanding this issue, the bottom line is that cheap and easy money has been one of the major causes of the recent property price boom. Now this has gone, people won't be able to borrow so much. Not only that, but only credit-worthy people will be able to borrow, which is a direct knock on effect. Now in case you didn't know, people don't normally buy houses for cash. They borrow to do it. In other words, if borrowings get curtailed, its the buyer firepower that will be reduced. This may reduce already pretty feeble demand and cause prices to at least stop rising. I hope that helps you.
FYI - my bedsit is nice big 3 bedroom house in the suburbs that I'm renting for the equivalent of mortgage payments that would represent about 60% of the "value" that it claimed to have last summer. God knows what people are pretending it's worth now. Probably not quite as much I guess. I intend to use my nice big fat cash savings to buy a house over the next three years as the slowdown really takes hold.
I'm all for private house ownership,. you see. What I'm against is ignorance, selfishness and greed.