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Era Of Cheap Mortgages Is Over, Says Treasury

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Even the treasury are bears now...

http://www.telegraph.co.uk/money/main.jhtm.../bcnmort118.xml

Homeowners were today warned that the era of cheap mortgages is officially over and that the credit crunch will last for at least another year.

# Lending fears put squeeze on mortgages

# How to survive the crunch and get a mortgage

The Treasury's top officials, appearing before Parliament, said that the premium over the Bank of England base rate charged by lenders was not expected to drop to the level enjoyed by consumers last year.

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The warning follows a spate of mortgage lenders withdrawing deals and increasing the cost despite falls in the base rate.

Halifax, the country's biggest mortgage lender, yesterday increased its tracker-rate deals by up to 0.3 percentage points and also hiked the cost of fixed-rate loans.

In evidence to the Treasury Select Committee, David Ramsden, the Treasury's top macro-economic expert, said that the Government now expected the credit crunch to last until at least mid-2009. He warned consumers seeking credit that conditions on the high street were unlikely to improve this year.

Millions of people face sharp increases in their mortgage costs when cheap deals expire this year. A growing number of people are also reporting difficulties re-mortgaging as banks and building societies tighten the criteria for offering loans.

Fears are growing that hundreds of thousands of people will be stuck in a debt trap – unable to switch to other deals and unable to afford to repay their loans.

This morning, the Citizens Advice Bureau reported a sharp rise in the number of people seeking help with mortgage arrears since last year.

The debt charity said staff at its bureaux in England and Wales had seen a 35% increase in people contacting them for help with the issue in January and February compared with the same months of 2007.

They are also seeing a continuing rise in the number of people facing problems paying for basic essentials such as gas, electricity, water and telephone bills and council tax.

A survey of nearly three-quarters of Citizens Advice Bureaux in England and Wales showed they had dealt with 215,000 new debt problems during the first two months of 2008 alone.

Treasury officials said today that they did not expect house prices to fall this year although they would rise in value by far less than in recent times.

They also insisted that unemployment was not forecast to increase despite the economic turmoil. Many independent experts believe the official predictions are overly optimistic.

There was some relief on the financial markets today with the FTSE-100 index of the country's leading stocks trading up by more than 100 points amid an expected cut in American interest rates.

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Treasury officials said today that they did not expect house prices to fall this year although they would rise in value by far less than in recent times.

I wonder why, given all the other things which they believe? Does this suggest that they cannot perhaps be believed on other things?

Peter.

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I wonder why, given all the other things which they believe? Does this suggest that they cannot perhaps be believed on other things?

Excellent newspeak... there's no cheap mortgages, but that won't affect the price of houses....

It's time for a lynching surely.

Edited by dazednconfused

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I wonder why, given all the other things which they believe? Does this suggest that they cannot perhaps be believed on other things?

I suspect their model doesn't cover "ain't got no more credit, bubba" as an option. Reality, on the other hand, does. It's probably a wonderfully ironic example of a lot of genuinely intelligent ladies and gents suffering a "computer says no" moment.

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I wonder why, given all the other things which they believe? Does this suggest that they cannot perhaps be believed on other things?

I'm not all that concerned by what the treasury expects. I am concerned only with what they intend to do.

Just look at who forms the treasury - and ask yourself this: Are they the sharpest pencils in the box?

Mevryn King and the BoE/MPC entourage in their statement today suggested that there was no way to know if houses would fall - and, if so, by how much. I think the reason for this is that the government may choose to step in to bale out mortgagees rather than accept the political fallout from mass evictions. If this is the case, then there will be few forced sellers, and prices might be maintained by selling no houses.

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I'm not all that concerned by what the treasury expects. I am concerned only with what they intend to do.

Just look at who forms the treasury - and ask yourself this: Are they the sharpest pencils in the box?

Mevryn King and the BoE/MPC entourage in their statement today suggested that there was no way to know if houses would fall - and, if so, by how much. I think the reason for this is that the government may choose to step in to bale out mortgagees rather than accept the political fallout from mass evictions. If this is the case, then there will be few forced sellers, and prices might be maintained by selling no houses.

It's time to admit to yourself that the establishment is against you. No one is going to be bailed out unless they are a bank. Well, there will be some scheme that helps out 6 families in Cardigan or something...

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I wonder why, given all the other things which they believe? Does this suggest that they cannot perhaps be believed on other things?

Peter.

I have observed that most spokesmen in this country, MPs especially, have convinced themselves that their words are so powerful that thay are single-handedly able to create ex nihilo that which they speak. If they say GP waiting lists will go down, they genuinely believe that this will occur without further effort. If they say educational stadards will rise, they genuinely believe that schools will start to churn out classes full of Einsteins. Conversely, and because of the power of their words, they feel compelled to refrain from telling any negative news as it is - speaking the truth, in other words. Hence, the phrase "house price falls" MUST NOT BE STATED because their words are so powerful that simply by saying these words, house prices will fall. Likewise, they may not speak the word "recession" because to do so would cause an instant recession to materialise.

They are in the grip of a God-delusion - they believe themselves to be gods.

"In the beginning God created the heavens and the earth. The earth was without form, and void; and darkness was on the face of the deep. And the Spirit of God was hovering over the face of the waters. Then God said, “Let there be light”; and there was light."

Edited for tupos.

Edited by Methinkshe

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Fears are growing that hundreds of thousands of people will be stuck in a debt trap – unable to switch to other deals and unable to afford to repay their loans.

What on earth are they talking about!!?

I hate the very idea that people are allowed to mortgage-hop around like mad frogs. Even worse, possible inability to do that comes as a nasty surprise to many!

I think the perception that you can close the loan early and switch over to another (=automatically better) one is eroding people's ability to plan ahead. I don't have problem with that if you can repay it early with cash but not with another loan... Now the tide is receding so let's see who had their trunks on...

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It's time to admit to yourself that the establishment is against you. No one is going to be bailed out unless they are a bank. Well, there will be some scheme that helps out 6 families in Cardigan or something...

Bailing out the borrowers = bailing out the banks (who do not then have to write down the value of the debt on their books).

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It's time to admit to yourself that the establishment is against you. No one is going to be bailed out unless they are a bank. Well, there will be some scheme that helps out 6 families in Cardigan or something...

LOL! I automatically assume that establishment policies are established simply by looking at the universe of possible policies and picking the one which is least advantageous to me, personally.

I've no debt; I've got my decent deposit; I don't own a house. Mass evictions and fire sales of real estate would suit me, personally... but wouldn't suit Labour if they aspire to re-election... or to avoid civil unrest. :D

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LOL! I automatically assume that establishment policies are established simply by looking at the universe of possible policies and picking the one which is least advantageous to me, personally.

I've no debt; I've got my decent deposit; I don't own a house. Mass evictions and fire sales of real estate would suit me, personally... but wouldn't suit Labour if they aspire to re-election... or to avoid civil unrest. :D

I wasn't saying you needed bailing out :) Just that we are contantly denied the truth for nefarious reasons which our leaders would rather keep to themselves. Off home to read some more Pilger now.

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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