moonriver Posted November 7, 2008 Share Posted November 7, 2008 don't have a link, but Matthew Wright just said on his show that he had some good news, in that it had just been announced Bradford and Bingley were going to pass on the full interest rate cut to their mortgage customers, which accounts for about 90% of their customers. Weren't B and B mortgage customers mostly BTL'ers? Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted November 7, 2008 Share Posted November 7, 2008 (edited) This will help soften the blow to the fact that their house price has crashed by 15% or £32,000 in the last 14 months. And if they bought last year on a 100% mortgage as 1,000s did they now owe the bank £32,000. Being in debt to the bank by £32,000 in 14 months isn't that good, but i guess a 1.5% cut in your mortgage will help. Edited November 7, 2008 by time 2 raise interest rates Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted November 7, 2008 Share Posted November 7, 2008 BTL bailout and bailout of the reckless. Paid for by tax, inflation and taking the piss with savings rates. Anybody know any good countries out there to invest in and deposit money rather than this shithouse? Quote Link to comment Share on other sites More sharing options...
Icantbelieveitsnotbutter Posted November 7, 2008 Share Posted November 7, 2008 Govt owns B&B, Govt allows B&B borrowers to pay interest on borrowing below market price (ie B&B is not able to reduce its coist of funds by 1.5% in the open market). Unless the Govt is cutting the savings rate hard to cover the cost of this, and is able to attract sufficient depositors to cover the mortgage lending book, then this is little more than a handout from the taxpayer to BTL landlords. This is going to end in tears.... Quote Link to comment Share on other sites More sharing options...
rettah Posted November 7, 2008 Share Posted November 7, 2008 The govt doesn't own the deposit side of B&B though. This was picked up by santander in the fire sale. Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted November 7, 2008 Share Posted November 7, 2008 don't have a link, but Matthew Wright just said on his show that he had some good news, in that it had just been announced Bradford and Bingley were going to pass on the full interest rate cut to their mortgage customers, which accounts for about 90% of their customers.Weren't B and B mortgage customers mostly BTL'ers? Also all those that bought last year on a 125% mortgage which 1000s and 1000s did well they are down by. Halifax ave house Aug 2007 £200,000 + 25% for a 125% mortgage means you now owe the bank £82,000. A 125% mortgage Aug 2007 £250,000 Ave house price Oct 2008 £168,000, a £32,000 loss on the house + £50,000 with the 125% mortgage. All those that did this now owe the bank £82,000 lets hope they don't lose their jobs in the coming ressession. Quote Link to comment Share on other sites More sharing options...
Slumpmonkey Returns Posted November 7, 2008 Share Posted November 7, 2008 That psychopath in number 10 is intent on turning the UK into a European Zimbabwe! :angry: Quote Link to comment Share on other sites More sharing options...
Icantbelieveitsnotbutter Posted November 7, 2008 Share Posted November 7, 2008 The govt doesn't own the deposit side of B&B though. This was picked up by santander in the fire sale. you are right, I had forgotten that. Taxpayers effectively collectively borrow to fund B&B borrowers. And B&B borrowers are not paying taxpayers an appropriate market rate for the risk they represent to us. Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted November 7, 2008 Share Posted November 7, 2008 (edited) That psychopath in number 10 is intent on turning the UK into a European Zimbabwe! :angry: As you can see from my above post Brown getting the banks to lend at 2007 levels isn't the best advice he could give at the moment. But i guess he's only intrested in staying in power and f...k all else. The banks are broke, and all facing massive losses on their mortgages. Edited November 7, 2008 by time 2 raise interest rates Quote Link to comment Share on other sites More sharing options...
moonriver Posted November 7, 2008 Author Share Posted November 7, 2008 Also all those that bought last year on a 125% mortgage which 1000s and 1000s did well they are down by.Halifax ave house Aug 2007 £200,000 + 25% for a 125% mortgage means you now owe the bank £82,000. A 125% mortgage Aug 2007 £250,000 Ave house price Oct 2008 £168,000, a £32,000 loss on the house + £50,000 with the 125% mortgage. All those that did this now owe the bank £82,000 lets hope they don't lose their jobs in the coming ressession. interesting figures. Looks like this B and B full interest rate cut alone, will end up costing the tax payer big time. :angry: Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted November 7, 2008 Share Posted November 7, 2008 interesting figures.Looks like this B and B full interest rate cut alone, will end up costing the tax payer big time. :angry: And if house prices fall back to around £120,000 which most economists are now saying all those that bought last year on a 100% mortgage will owe the bank £80,000 ave house price Aug 2007 £200,000 - £120,000 = £80,000. And all those that bought the ave house in 2007 on a 125% mortgage will owe the bank £250,000 - £125,000 = £125,000. Well done Labour.Grodon is a ? Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted November 7, 2008 Share Posted November 7, 2008 (edited) And if house prices fall back to around £120,000 which most economists are now saying all those that bought last year on a 100% mortgagewill owe the bank £80,000 ave house price Aug 2007 £200,000 - £120,000 = £80,000. And all those that bought the ave house in 2007 on a 125% mortgage will owe the bank £250,000 - £125,000 = £125,000. Well done Labour.Grodon is a ? So to sum up all those that didn't buy last year on these terms are all up by the above sums, they could also get 6-7% interest rates on their savings. Edited November 7, 2008 by time 2 raise interest rates Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted November 7, 2008 Share Posted November 7, 2008 Where are all the bulls today? i would have thought they would all be here banging on about the rate cut. Quote Link to comment Share on other sites More sharing options...
stats Posted November 7, 2008 Share Posted November 7, 2008 Also all those that bought last year on a 125% mortgage which 1000s and 1000s did well they are down by.Halifax ave house Aug 2007 £200,000 + 25% for a 125% mortgage means you now owe the bank £82,000. A 125% mortgage Aug 2007 £250,000 Ave house price Oct 2008 £168,000, a £32,000 loss on the house + £50,000 with the 125% mortgage. All those that did this now owe the bank £82,000 lets hope they don't lose their jobs in the coming ressession. No they own the bank £250K and have a house that will not sell! Quote Link to comment Share on other sites More sharing options...
moonriver Posted November 7, 2008 Author Share Posted November 7, 2008 Where are all the bulls today? i would have thought they would all be here banging on about the rate cut. yes puzzling that, I expected some around today, we had a few yesterday. Quote Link to comment Share on other sites More sharing options...
FortuneFTB Posted November 7, 2008 Share Posted November 7, 2008 On the bright side though if you owe the bank 200K and your mortgage interest rate is cut by 1.5% thats about 3 Grand a year less you have to pay the bank, in many cases this will be the difference between getting repoed or not for people that overstetched themselves. I bet there will be a lot of BTL landlords that where getting brown trousers breathing a sigh of relief I've got a few grand in the bank I might as well just blow on coke and hookers though as savings rates are now lower than inflation Quote Link to comment Share on other sites More sharing options...
mdman Posted November 7, 2008 Share Posted November 7, 2008 So are the Government playing a good cop/ bad cop routine with B&B/ NR playing the respective roles? Quote Link to comment Share on other sites More sharing options...
_w_ Posted November 7, 2008 Share Posted November 7, 2008 So one large group of borrowers is very heavily subsidised by the taxpayer and the rest isn't. This is a serious market distortion. Consequences there must be, I wonder what they are. Quote Link to comment Share on other sites More sharing options...
TeddyBear Posted November 7, 2008 Share Posted November 7, 2008 This rate cut will allow a BTL on a B&B mortgage I know to just about cover interest with rent rather than subsidising it by £150 per month. It means that their tenant is safe for now, won't get repossessed but this BTLer certainly won't be able to afford to take on any more debt and will still need to pay maintenance and repairs on the flat out of their own pocket. Thus, it stops a bit more carnage but I don't see it reinflating the bubble in any way. Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted November 7, 2008 Share Posted November 7, 2008 No they own the bank £250K and have a house that will not sell! Yes they owe the bank £250,000 but if they sold at todays ave house price of £168,000 they would still owe the bank £82,000, when sold. Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted November 7, 2008 Share Posted November 7, 2008 On the bright side though if you owe the bank 200K and your mortgage interest rate is cut by 1.5% thats about 3 Grand a year less you have to pay the bank, in many cases this will be the difference between getting repoed or not for people that overstetched themselves.I bet there will be a lot of BTL landlords that where getting brown trousers breathing a sigh of relief I've got a few grand in the bank I might as well just blow on coke and hookers though as savings rates are now lower than inflation But tha Halifax are paying 7% on a one year bond with deflation on the way. Quote Link to comment Share on other sites More sharing options...
Slumpmonkey Returns Posted November 7, 2008 Share Posted November 7, 2008 OK, so I am a little annoyed that I and many others are being asked to pay to help BTLers. However, the one thing that soothes my soul is the thought that many of these BTL parasites who think that the government has just bailed them out will be losing their jobs in the next few months! They won't be so smug then will they? Quote Link to comment Share on other sites More sharing options...
lets get it right Posted November 7, 2008 Share Posted November 7, 2008 Govt owns B&B, Govt allows B&B borrowers to pay interest on borrowing below market price (ie B&B is not able to reduce its coist of funds by 1.5% in the open market).Unless the Govt is cutting the savings rate hard to cover the cost of this, and is able to attract sufficient depositors to cover the mortgage lending book, then this is little more than a handout from the taxpayer to BTL landlords. This is going to end in tears.... Yes, ours. Quote Link to comment Share on other sites More sharing options...
FortuneFTB Posted November 7, 2008 Share Posted November 7, 2008 I'm on a BoE base rate tracker +0.19% and have a 110K Mortgage in Nov 07 I was making a repayment of £712 Nov 2008 will be £537 So I'm certainly feeling richer, I have no floor on my mortgage so if interest rates go to the possible 0% I wonder if they will let me switch to interest only and pay £17 a month, Think what I could do with the portion I would have been paying back as capital, It would actually pay me to go interest only The world is screwed Quote Link to comment Share on other sites More sharing options...
stats Posted November 7, 2008 Share Posted November 7, 2008 Yes they owe the bank £250,000 but if they sold at todays ave house price of £168,000 they would still owe the bank £82,000, when sold. Yes I understand that, but that's a very big if. These are typical cases which will end in a repossession, because they didn't have a deposit in the first place. The banks will take the hit... sold at auction for < 100K and the bank loses 150K. Quote Link to comment Share on other sites More sharing options...
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