"The 8p-a-month mortgage is set to become a reality for thousands of borrowers next week because of over-generous loan terms offered by banks and building societies in the benign era just before the credit crunch hit.

Thousands of borrowers on tracker deals struck in the early summer of 2007 will pay almost no interest and could even be in a position to demand payment from their banks on a strict interpretation of the fine print.

Their effective mortgage rate is set to fall close to or even below zero if, as expected, the Bank of England cuts base rate from 1.5 per cent to an unprecedented low of 1 per cent next Thursday.

The biggest beneficiaries will be thousands of Cheltenham & Gloucester borrowers who took out a tracker product in July 2007 which charges base rate minus 1.01 per cent. Lloyds Banking Group, now 43 per cent owned by the taxpayer and also the owner of C&G, said that there was a zero floor to the deal and that because its computer systems could not cope with zero, it would be temporarily charging 0.001 per cent if base rate is cut to 1per cent.

For borrowers on a £100,000 interest-only mortgage that would translate into a monthly interest payment of 8p"

 

That may be good now but when the rates go sky rocketing up all the fixed rates will be pulled keeping these people on the trackers forcing them to either switch deal to other trackers and paying a fee, or paying way over the odds because they cannot fix.

They will get it all back in the end

 

This frankly is bollocks. For starters the profits at a bank determine its shareprice so a bank CEO should know that the usual economic cycle will not suddenly change becuase he wants it to. Shareholders very rarely demand anything they ask. As for blaming the public, are you kidding many people do not even have a pension, many others simply have whatever pension their company provides with many looking at 10-20 year cycles if they are looking for the product with the best returns. TO shift the blame to the public is a **** take. Banks screwed up becuase they have built a model that only rewards short term thinking not long term, Banks set it up this way and regulators let it happen.

 

Well Ive decided to start helping first time buyers get on the ladder of the housing market .I am going to become a mortgage lender .I feel as though i have to do it .!!


























Well actually the Government has decided I have to do it ,so my Council tax will now be lent out to first time buyers at a reasonable rate ,to help them get on the first rung of the ladder .
Just let me know how much you need and I will sort it out for you .You must pay me back though !!!!!!!!

 

I wish there was a mortgage broker knocking around on here. I'm in the market for a deal now.

 

My mortgage is now £94 , my council tax is £140!

 

One of my Mortgages has now hit £3:13 ... surely it wasn't worth the stamp to tell me?

 

Re council tax - we got a £100 refund on Friday and I have NO idea why!!!

 

You havent lost a portion of your garden to the sea have you .???

 

Not that I know of!

 

This is an interesting article:-

"House prices could be the same at the end of 2013 as they were in 2003, according to a think tank that warns the house price crash could leave a generation of homeowners out of pocket"

"The Centre for Economics and Business Research is forecasting that property prices will fall by 40 per cent from their peak in 2007 unless Government action succeeds in boosting mortgage lending.

It warns that the average house price could be as low as £139,000 in five years' time – just £1,000 more than the average price at the end of 2003"

"The forecast is the latest piece of research to suggest that the house price crash, the worst in living memory, is far from over.

Last week the Land Registry said that the number of housing transactions had fallen by 59 per cent compared with a year ago, as hundreds of thousands home owners could not get a mortgage and were unable to move house"

Source:- Telegraph.co.uk

 

Well with car prices on the way up ,(Ford /Vauxhall ) ,is it time for houses to turn the corner ????





Who knows ???

 

Any charts out there showing the direct correlation between car prices and house prices?














Thought not!

 

So in another 5 years, the average house price will be £11k lower than they are now?

Dreaming I think. Prices are falling at over £1k per month. We'll be at £139k by end of this year.

Unless hyper inflation keeps in, then we will all be squillionaires, and paying for bread with wheelbarrows of money!

 

Or 1 trillion pound notes...

 

Why house prices may fall another 38% - This is Money Blog

As I was saying earlier in the thread... but looking at all previous crashes, the bottom always over-shoots, so I expect we'll probably see another 50% off the current prices, or even more if we go into a depression which lasts 5-10years.

 

The link to Earnings is much less of a driving force when Interest Rates are so low ..... the same income can borrow more.

 

And then struggle to pay it back when the interest rate rises.

 

The headlines at present talk only of falling property prices, but the real story is of falling property transaction volumes. This betrays the conflict at the heart of the property market – that of sellers expectations for their properties’ values failing to keep track of buyers’ expectations of being able to use the current market to secure a bargain.


New research, conducted by Mouseprice.com, has revealed the extent of the problems faced by both home sellers and buyers in the current market. Using data from the Mouseprice website built up over the last two years, researchers have found evidence that gives an insight into just how divergent sellers’ and buyers’ opinions on price have become.

The average length of time it took to sell a property increased a staggering 40 per cent, from 3.9 months in the last quarter of 2007 to 5.5 months in the last quarter of 2008. In line with this, sales volumes decreased by approximately 50 per cent between 2007 and 2008. Interestingly however, price levels over the period decreased by relatively small amounts, for example Land Registry reported a price drop of 13.5 per cent for 2008.

This shows that home sellers are refusing to let their properties go at lower prices than they believe were obtainable even a few months ago. This phenomenon is not new and is known to economists as price "stickiness", with individual vendors and homeowners emotionally, and often financially (because of high loan to value mortgages), unable to accept that their properties' prices have fallen significantly. The data also suggests that buyers are well aware of their power in the market, and are content to hang on to their cash, as they seem confident that there will be more price reductions to come.

Zipporah Morrison Baker, a spokesperson for Mouseprice said, “The fact that average selling times have increased is evidence that buyers and sellers are not reaching agreement on price as quickly as before. After a period of assuming that your property is worth a certain amount, people are reluctant to settle for less. This is a psychological effect brought on by relentless house price rises over the last few years”.

“House prices rises over the last few years have greatly outstripped earnings growth and have made individuals and families “feel” wealthier. With the myth of inevitability of house price growth exposed, many people will realise the necessity of living within their earnings, as their property can no longer be relied upon to grow their net wealth”.

As well as the generalised effect upon spending patterns brought on by this change, property professionals are particularly feeling the crunch. Estate Agents and Surveyors are paid on a case by case basis, and as transaction volumes have fallen, these professions have been at the bleeding edge of the recession.

Source:- Mortgage Introducer

 

Surely those who were struggling to pay their mortgages 6 months ago, are now able to due to the recent rate cuts. So they don't 'have' to sell anymore.

 

Lots of recent buyers 'FIXED' for 2 Years in 2007 ...... they cannot re-mortgage, have houses which now valued at 30% less then they paid, means if they want to take advantage of cheap rates cannot do so due to the LTV.

 

Hopefully there'll be another interest rate cut tomorrow!

 

I hope not.

 

Me too. This is leading us to ruin. I do not see the evidence that reduced interest rates are making people spend the savings. People are fearful and are saving it, and getting a pi$$ poor rate of return.

 

Just seen an old chap in the bank having a barney about the interest rates.

Said he was going to just take his few thousand quid elsewhere.

Where that would be I don't know.

 

Probably under his matress .The old Duffer !!!!!!!!!

 

If my bank starts charging me to keep my savings (due to negative interest rates), I'm taking out the cash and burying it under the house

 

House prices up 1.9% in January, accordign to the Halifax!

BBC NEWS | Business | House prices 'up 1.9% in January'

So, Nationwide report a 1.3% fall in January, Halifax a 1.9% rise. Who's lying, the independant building society, or the Bank whose largest shareholder is HMG!

Queue a mad rush for houses now, as people jump on the bandwagon of low interest rates and rising house prices again. Only to be shafted when rates rise later on this year.

We are being led by a bunch of thieving lying scum, who will do anything to perpetuate their stay in power!

 

I am going to be mr angry if rates are cut.
I was covering all our annual bills with interest, now it's getting us **** all.
Can't wait for them to get sensible again.