Tuesday, January 25, 2011

Fix-up; look sharp.

Are your mortgage payments about to go through the roof?

'If you haven't reviewed your mortgage product recently you may unwittingly be throwing away thousands of pounds. Borrowers sitting on their lender's standard variable rate (SVR) may think they have the lowest monthly repayments possible, but that isn't necessarily the case. Not all lenders' SVRs are competitively priced; there could well be be cheaper fixed-rate and tracker mortgages available.'

Posted by sibley's b'stard child @ 12:28 PM (2581 views)
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16 thoughts on “Fix-up; look sharp.

  • mark wadsworth says:

    Unfortunately, I don’t think they are. They might return to levels of three or four years ago, but those rates are still pretty cheap historically. Remember: this government will do anything it can to keep the party going. It’s now quite clear they are not going to let prices crash and blame it all on Labour, they’ve left it far too late for that.

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  • I thought Cleggie was fairly clear last w/end that Labour had made the housing market a casino, so I think they are factoring in a fall in the market. I agree with MW, they have lost the political opportunity of making it crash and blaming Labour.

    As for a sudden burst of UK interest rate rises, I don’t think so. Especially after Trichet’s remarks yesterday regarding Euro IRs. I don’t think politicians anywhere in Europe are keen on getting pensioners a sensible rate on their savings (I’m not a pensioner, but my mum is).

    First Direct and Halifax have already edged up their fixed rates for new fixed borrowing in the last week or so. Can’t see MPC putting rates up by more than 0.75% in the next 12 months.

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  • MW @1 – I thought I was the lone voice on here saying that the Tories were obviously going to keep prices high because they’d left it too late to let them crash and blame Labour. As such, I see us going Japan stylee for the next umpteen years (2018 I’m sticking to).

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  • What’s the agenda of the media at the moment? I’m not a conspiracy nut but either they are stupid or the banks are telling them to spook people to fix.

    Merv and the MPC have said that they won’t raise rates until there is significant wag inflation, that current inflation is due to temporary factors, and most importantly that they want to “help” the housing market. Seems pretty obvious to me that they won’t raise rates if they can get away with it, which for the moment, they can.

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  • mark wadsworth says:

    Alan 540, we have been debating this for a year or two, I vaguely hoped that the Lib-Cons would allow prices to crash but didn’t expect them to, and that possibility seems less and less likely as each month passes. I distinctly remember Tory cheerleader Uncle Tom insisting that they would allow prices to crash (ha!)

    So let’s agree on 2018 for bottom of market, that seems as good a guess as any.

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  • “Seems pretty obvious to me that they won’t raise rates if they can get away with it, which for the moment, they can”.

    Todays GDP figures give them another 3 months breathing space.

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  • I’m not clear what could the Tories could have done to enable prices to crash quickly?

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  • @ bellwether,
    All governments have influence.
    1. Hinting/warning rates would rise.
    2. Leaning slightly on MPC to raise rates on the basis that the “crisis was over” etc.
    3. Discussing and publicising the housing bubble via their many press connections.
    and so on….

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  • @8

    Build some houses
    Loosen planning restrictions
    Increase taxes on second houses

    etc.

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  • Made BTL less attractive by changing short hold tenancy agreement laws.

    Made BTL repay loans so they compete on an even footing with FTBers

    Come up with a clear registration scheme for houses so the Inland Revenue knows who owns what and collects capital gains tax on 2nd, 3rd homes etc accordingly.

    Heavier restrictions on overseas investors purchasing UK property.

    Actually put a restriction on the number of homes a family can own.

    There’s absolutely loads of things that could of been done to get prices down by 25% or so that would have put the future of growth on a more even footing.

    And still got away with blaming it on labour.

    I am also thinking they have lost that opportunity now and will likely enter the next election with prices still falling.

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  • Problem is, that if the government allow house prices to crash (as a few suggested they should), then banks will need bailed out again.

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  • mark wadsworth says:

    Bellw, add to the list that the Tories could have nudged Council Tax up by 50% instead of raising VAT by 2.5%. They claim that the latter will increase tax revenues by £13 bn (which it won’t) while the former clearly would have done. You just ask people for money and if they don’t pay you put them in jail and sell their house. Simples.

    I wouldn’t expect them to flirt with LVT because taxes are for “little people” to pay on their grubby earnings, taxes aren’t for English Gentlemen In Their Castles.

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  • mark wadsworth says:

    Collywolly: “Problem is, that if the government allow house prices to crash (as a few suggested they should), then banks will need bailed out again.”

    I’m afraid you’ve fallen for a bit of Home-Owner-Ist propaganda there, as it simply isn’t true.

    I invite your to look up at BoE what the distribution of LTV’s is, then pencil in a price fall of x% and assume that y% of people in nequity default and make themselves bankrupt, and then work out what % write down on banking assets this means.

    Even if you assume 50% fall and “all of them” then banks would only need to write down assets by 20% or something, which could be patched up with debt-for-equity swaps (no need for taxpayer involvement).

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  • mark wadsworth says:

    Bellw, nobody seems to have mentioned “Max mortgages of 75% LTV and max mortgages of 2.5 times income”, that’ll fix it.

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  • @13 MW – true but everyone knows that a house price crash would be political suicide because about 70% of people in the UK are owner-occupiers (and quite a few have massive mortgages to boot).

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  • mark wadsworth says:

    Cyril, that is true, but high house prices are not good for the economy, they are bad for the economy, and 70% of adults in the UK are also in employment, so what you lose on the house price swing you more than gain on the economy roundabout.

    It’s like watching somebody on a sinking boat saying “I’m not leaving because I don’t want to leave my biscuits behind” when the people on the other boat trying to rescue him are offering him a hot meal.

    That was a rubbish analogy I admit.

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