Thursday, Jan 07, 2010
Sweet reading
Mail online: Homeowners stung as mortgage lenders hike charges by £1,400 a year - despite Bank of England holding rate at record low
An increase in the SVR is an expensive headache for homeowners, who are already struggling to pay their mortgage and all the other household bills.
Many are struggling on salaries which have been frozen for a year, with the majority of bosses warning of a second pay freeze this year.
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'We fully appreciate that current economic conditions continue to impose unwelcome financial constraints on all our borrowers.
'However, events in the economy over which we have no control have left us with no alternative.'
Mr Quinton said part of the blame lies with the difficulty of competing for mortgage and savings customers with banks which have been helped by the taxpayer
Posted by waitingtobuy @ 08:20 PM (1397 views) Add Comment
13 Comments
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1. devo said...
It comes as a top economist said he thinks the Bank should 'go the whole hog' and cut the base rate to zero per cent.
Roger Bootle, economic adviser to the accountants Deloitte, said: 'What's more, I reckon that they [rates] will stay at one per cent or below for five years.'
2. hpwatcher said...
It comes as a top economist said he thinks the Bank should 'go the whole hog' and cut the base rate to zero per cent.
Roger Bootle, economic adviser to the accountants Deloitte, said: 'What's more, I reckon that they [rates] will stay at one per cent or below for five years.'
Let's give everybody a million pounds.
3. fallingbuzzard said...
I believe Bootle's saying that the banks should be recapitalised as quickly as possible in the knowledge that borrowers will have to pay market price, whatever the base rate may happen to be. I don't see any inconsistency between the viewpoints. Someone's got to pay. Logically its borrowers although the press would like us to think that its savers because thats the nmore convenient story at the moment. It will quickly flip the opposite way.
4. devo said...
3. fallingbuzzard said... I believe Bootle's saying that the banks should be recapitalised
You assume banks CAN be recapitalised.
Face it - it's over.
5. p. doff said...
....''Many are struggling on salaries which have been frozen for a year, with the majority of bosses warning of a second pay freeze this year''
But .... Extract from State Pension forecast publication :- 'Your basic State Pension could be worth more than the amount shown. This is because from a date between 2012 and 2015 the rates will go up in line with earnings rather than prices'.
Hmmm .... So Gordon's lot believe that nice fat pay rises will be on the cards again from 2012 ..... and that above target price inflation isn't going to happen.
Well, that's ok then - miracle economy all fixed!
6. fallingbuzzard said...
@4, devo, he assumes it. I'm waiting until all the capital is gone to snap up the best assets for close to free
7. devo said...
6. fallingbuzzard said.. I'm waiting until all the capital is gone to snap up the best assets for close to free
very clever of you
8. fallingbuzzard said...
i think so too
9. mick rupert said...
I posted this on the Mail's website. Dunno if they'll print it (probably not):
--------------------------------------------------------------------------------------------------------
What would happen if the BOE set interest rates at a sensible rate (5%, for example)?
(i) The interest payable on savings accounts would outweigh the yield of a buy-to-let "investment" property.
(ii) The interest on the loans taken out by those feckless irresponsibles would put them into real hardship, potentially leading to repossessions.
Unfortunately both of the above would take the bottom out of house prices which the government have a vested interest in maintaining as historically high at any cost, through historically low interest rates.
Why do the government have a vested interest in low interest rates, therefore? Well, most of them have more than just a home to live in, don't they?!
10. markj69 str05 said...
Sh1t's going to hit the fan sooner or later. Better it happens at the beginning of a new gov't term! Leaving time for dust to settle. Only time wil tell.
If IR remains at 1% for 5 yrs, that will allow homeowners to pay back 4% x 5 =20% of their borrowing. At least then if the market dips 20% it becomes more affordable/digestible. But, a crash just before the next GE won't be good planning/timing.
Lance this boil now (After GE) - That's what I say.
11. keith thomas said...
What's the BOE artificially set rate got to do with anything? Interest rates should be set by the market depending on supply, demand and risk just like any commodity. The banks are setting the SVR according to the market as they should do.
12. nickb said...
banks could be recapitalised by the BofE buying up their bad assets with newly created credit. At zero cost to the taxpayer. Yes this creates moral hazard, but then one could introduce credit controls (remember those?) to prevent future bubbles.
13. refusetobuy said...
Give everyone a million pounds would do wonders for closing the gap between the rich and the poor.