Cookie Blog - All Comments

re: Must be a whole market approach

Jade — Thu, 31 Jul 2008 11:32:59 GMT

Wibble,

With the global credit crunch showing no signs of abating, and in the latest global financial stability report, the IMF says that falling house prices and slowing economic growth are hitting credit. It warns that banks are under renewed stress, and further cutbacks in bank lending could deepen the slowdown.

Surely this requires a base rate reduction does it not?

re: Must be a whole market approach

wibble — Wed, 30 Jul 2008 15:44:06 GMT

inally, there is that slight glimmer of hope of some stability. All indications are that the Bank of England base rate might stay at 5% for the rest of the year.

Dont think so - inflation is going to head up imminently, and the bank of englands inflation report will say this. Following todays hike in the cost of gas and electricity, its going to 5.25, maybe even 5.5%. Just you wait and see, Ill be back to rub your face in it soon :)

re: A growing number await news on base rate decision

Cookie — Tue, 15 Jul 2008 09:46:10 GMT

Today’s mortgage market has seen the pendulum swing from one extreme to the other on bank’s appetite to lend and both blog pieces have highlighted the predicament of those borrowers who have no other alternative but to make do and survive on their lender’s SVR.

Two points have been made:

• Historically, SVRs have generally not directly been influenced by risk and increased probability of default or market indicators, such as SWAPS and LIBOR. Therefore, in real terms, SVRs are currently underpriced compared with the rest of the market.

• Historically, banks and building societies have toed the line with regard to increases in their SVRs due to its limited impact on their mortgage book.

The bottom line message is that we hope that the status quo continues.

re: A growing number await news on base rate decision

wibble — Mon, 14 Jul 2008 13:46:48 GMT

FLIP-FLOP. One minute you say svrs will be in your best buys and now you say "an increase might give lenders the opportunity to adjust their SVR well above the base rate movement and wipe out any option of a reasonable last resort." Make up ur mind, what is it to be?

re: Time invested is time well spent

wibble — Tue, 01 Jul 2008 11:25:33 GMT

"The opposite of a prolonged credit crunch is cheap, easy and plentiful lending practices sometimes known as ‘easy money’ or ‘loose credit’. I can’t remember these phrases ever being used at any time by financial institutions or the Treasury when describing the good times of economic growth over the last 10 years."

Yes they were for gods sake. Northern Rock is a financial institution and ill give you four words on their posters and flyers. NORTHERN ROCKS TOGETHER MORTGAGE.

If thats not easy money what is!

re: Is a standard variable rate nearly a ‘best buy’ option?

Cookie — Wed, 18 Jun 2008 08:59:13 GMT

Thanks for feedback, Wibble. You are perfectly correct, it is highly unlikely that we would ever see standard variable rates in the moneyfacts.co.uk best buy charts and I hope I am never in the position to support their inclusion. However, you must agree that there could be a few exceptions to this rule within the current marketplace.

Yes, I do work for Moneyfacts and I am not too ignorant of the mechanics of products and complexities of the UK mortgage market.

You could call my closing statement provocative but I think is balanced with the other facts mentioned within the blog. It demonstrates how quickly we have witnessed a total market turnaround within 12 months. This time a year ago, if you were paying a lender’s standard variable rate, most likely you were approaching the end of your term or your outstanding balance was just too small to warrant the extra costs of a remortgage. If not, your broker or bank would have been silly not to spot it and to seize an opportunity.

With the two year SWAP money market rates yesterday at 6.52% and increases don’t seem to be abating, house prices said to drop by 20% before the year is out and lender maximum LTVs constantly decreasing, unfortunately standard variable rates might be the only option for many households over the next couple of years. Let us hope that lenders amend their standard variable rates responsibly in the future and do so in line with changes in the bank base rate.

I hope the above puts your mind at rest. Please be assured that inclusions within moneyfacts’ best buy charts are always selected responsibly, just as we have been doing so for years. However, do not forget that there are over 200 discounted variable rate mortgages currently on the market that are linked to the lender’s standard variable rate and tens of thousands currently in the hands of borrowers. Some of these current better products feature in Moneyfacts’ Discounted Variable and First Time Buyer Best Buy charts at www.moneyfacts.co.uk.

re: Is a standard variable rate nearly a ‘best buy’ option?

wibble — Mon, 16 Jun 2008 12:28:57 GMT

You're talking absolute rubbish - do you work for Moneyfacts? Lenders can adjust their SVR at any time, and to whatever they like. To suggest that

he way things are going, we might see standard variable rates in the Moneyfacts.co.uk best buy charts.

Is utter nonsense.

re: If Only We Could See The Future

george — Tue, 10 Jun 2008 15:26:53 GMT

look into the past and the future will be revealed

re: If Only We Could See The Future

Cookie — Fri, 06 Jun 2008 15:52:04 GMT

A possible temporary suspension of stamp duty below £250,000 could be the preferred option, as happened during the last property recession in 1991. I think stamp duty is here to stay but changes can play its part in relieving some pressure on the market. Stamp duty is not going to resolve this crisis on its own and I don’t think a tax savings of £2,500 on a £250K property is going to be too comforting to a consumer, if funds can’t be raised to initiate the purchase in the first place.

I do feel there are merits in calling for stamp duty to be charged on a sliding scale, i.e. between £125K and £250K at 1%, then only the portion in excess of £250K charged at 3%, and so on.

Regarding the notion to abolish stamp duty within the current climate to encourage first time buyers to get on the housing ladder; is it prudent to even consider entering the market at any mention of a housing slump? There is no risk in taking a step back and waiting to buy ‘low’, but I am not sure if stamp duty will the biggest factor in changing my mind in taking that life changing decision.

I know most mortgage providers classify homeowners who have been out the market for at least a year as first time buyers.

But will the Treasury see it this way?

If I sell my house, put the money on a 32 day call and spend the time in a bed and breakfast with a great view while looking for a new property; then find the perfect one and buy it – am I a first time buyer entitled to a tax-free benefit to help me back onto the property ladder?

re: If Only We Could See The Future

Kyle — Fri, 06 Jun 2008 08:09:43 GMT

After reading Phil & Kirstie's views on house prices on the C4 website I do think the Govt needs to act and reduce, or preferably scrap stamp duty to give the market a boost.

What does Cookie think about scrapping stamp duty?