Tuesday, November 4, 2008
Pushing a piece of string
Abbey raises tracker mortgage rate
Wherein Abbey announce that they have no intention of reducing mortgage rates by preempting a possible BoE rate cut on Thursday by raising its tracker rates for new borrowers by 0.5% from today. All these people who believe that cutting BoE rates is 'the answer' are going to have to learn that a) it isn't and b) it doesn't have any effect on actual mortgage rates anyway.
Posted by mark wadsworth @ 03:44 PM (844 views)
8 thoughts on “Pushing a piece of string”
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renting2 says:
Well, this must be music to GB’s ears. The whole spin machine will now put the blame on the banks with HMG coming out smelling of roses. The banks will shed a few jobs then, when the sheoples’ attention span has passed (next soap episode), back to business as usual.
51ck-6-51x says:
This post could so easily have been a comment in response to my last comment (on the previous post) if I’d not have forgotten to use my admin password!
I was just saying how in the U.S. it’s legal for home owners to walk away from their future obligations and just lose the asset, whereas in the U.K. this is not the case.
We see this reflected here in that in the U.S. mortgages are being renegotiated on mass (last post) at a much earlier stage of proceedings* whereas the U.K. portfolio managers are increasing their rates (this post).
51ck-6-51x says:
* This will happen in the UK but the legal standpoint makes it more logical for banks to attempt to squeeze as much as they can out of their contracts first, then when people cannot afford to pay the mortgage offer a deal whereby the bank owns the asset and the homeowner becomes a tenant (or some way toward this situation).
Fjcruiser says:
When LloydTSB takes over HBOS, almost 50% existing borrowers will have their mortgage with these guys or Nationwide. When these guys raise their rates, the rest will follow. Customers will not be able to switch to other lenders because all the rates will be roughly the same. No competition, so back to the 70s!
planning4acrash says:
People can walk away in UK if not pursued for ?12?yrs. They wait with private detectives till you can afford repayment, never warning of the auction shortfall. Owners have no control of auction prices. This is tyranny/slavery. It must change!
stillthinking says:
Come on. Nobody was forced to buy a house. Nobody was forced to buy a large flat screen tv on credit. Its nothing to do with tyranny or slavery. You ignore a key aspect, i.e. others were expected to pay the bills.
There is no moral cause to bail people out at all. If they had been successful I would be paying off a crippling 25 year loan on some manky flat right now. Certainly, if you mean do I pity somebody who attempted to get ahead through cornering the property market and then failing, yes, perhaps I do a bit, but I don’t want to pay the costs of an unsuccessful attempt to put me in the sh*t.
There is, as usual, just normal greed. I don’t see any slaves in the UK at all, if anything, the unemployed are a very cushy number indeed, and have property I can’t afford as a worker.
mark wadsworth says:
R2, that’s a good point.
P4AC, it is not tyranny. It’s a tad unfair if banks dump a property for less than what you could reasonably expect to sell it for, even in a falling market (begs the question, why would banks do this, it’s sort of their own money), but a borrower who is behind on repayments can prevent this by selling up as soon as he or she knows that they are about to hit the buffers and not hanging on until the bitter end. As stillthinking explains.
waiting patiently says:
P4AC @ 4 has a valid point. A word of warning though. By and large the banks don’t need private detectives. If someone owes them money and has subsequently taken out new credit, their details will be in the system and are available at the search of a database. If you have credit, your situation has presumably improved and as such you are fair game. My advice – stay out of the debt system for the 12 years and the banks will struggle to track you down thus loosing their rights of recovery.
To anyone who needs this advice – good luck.