February 2008

The Mortgage Market
29 February 2008

The Chief Executive of the FSA, Mr Sants, said in a recent meeting about mortgages “I don’t think markets are ever going to return to where they were. The idea that at some point they will go back to normal, I think, is a misnomer”.

He went on to explain this comment by saying that in recent years banks have sold off trenches of their mortgage debt, to other companies within the financial sector obviously, reducing their risk. This has meant that they had been able to write more business as the risk is much reduced.

With little to no companies wishing to buy this debt now the banks must keep the risk on their own balance sheets and will therefore want to reduce this risk by tightening their lending policies which will make it harder for people to obtain credit.

Interest Rates Sliced
7th February 2008

The Bank of England Base rate has been reduced to 5.25%. Many predicted this would happen although I for one did not see it as clear cut. With Decembers inflation report showing an increase the MPC is stuck between a rock and a hard place which is, do we try to boost the economy or keep inflation under control.

Given the rate cut today it will be interesting to see what the outcome of the future MPC meetings will be. Once again – Watch This Space!!!

The future of interest rates
7th February 2008

The MPC will meet today to once again decide the fate of the bank of England Interest Rate changes. Many are predicting a rate cut but many have been predicting this since the turn of the year. Lets just watch this space!!!

‘Your home may be repossessed if you do not keep up repayments on your mortgage’