UK NEWS

MILLIONS FACING MORTGAGE MISERY

Homeowners who struggle with their mortgage face repossession

Tuesday June 10,2008

By Geoff Marsh for express.co.uk

Comment Speech Bubble Have your say(9)

MILLIONS are facing huge rises in their mortgages as banks continue to pass the cost of the credit crunch onto homeowners.

As falling house prices push thousands into negative equity, figures released today show the average cost of certain fixed rate deals has also jumped to a new eight year high.

Lenders continued raising their rates to reflect the problems in the market caused by the credit crunch.

The average cost of a two-year fixed rate mortgage for someone with a 25 per cent deposit rose by 0.21 per cent during May to 6.27 per cent, its highest level since September 2000, when interest rates were at 6 per cent.

The change was even steeper for people taking out a five-year fixed rate loan with the same size deposit, with the cost of these deals rising to 6.11 per cent compared with 5.85 per cent in April.

Falling house prices are pushing thousands into negative equity

But fixed rate deals are not the only ones that are increasing, with the Bank of England figures also showing that the average cost of a tracker mortgage with a loan to value ratio (LTV) of 75 per cent rose by 0.2 per cent during May to average 6.19 per cent, down only slightly from 6.24 per cent in January, despite base rates being cut twice since then.

The Bank of England data also failed to give a figure for the average rate of a two-year fixed rate mortgage for someone with a 5 per cent deposit for the first time since 1995 due to having insufficient data on the loans.

There are now just 18 different two-year fixed rate mortgages for people with a deposit of this size available across the market, compared with 235 in July last year.

A combination of falling house prices and tighter lending practices have led to lenders demanding increasingly high deposits from borrowers since the beginning of the year.

Across the whole mortgage market there are now just 168 residential loans available on an LTV of 95 per cent out of a total of 3,167 different mortgages, compared with nearly 1,000 a year ago.

Meanwhile figures from the Council of Mortgage Lenders showed that 23,200 100 per cent mortgages were taken out during the year to the end of March.

People who take out these loans are vulnerable to getting into negative equity when house prices are falling because they do not have the cushion of a deposit.

But the CML stressed that it was important to see the figures in context, adding that they represented less than 3 per cent of the 900,000 new mortgages taken out during the period and were a tiny proportion of the 11.8 million mortgages that are currently outstanding.

The group also said it was wrong to assume that all of these people would be in negative equity as price falls varied across different areas and people would be repaying their loans at different rates, while being in negative equity was only a problem if homeowners were forced to sell their property.

MILLIONS FACING MORTGAGE MISERY

11.06.08, 9:02am

IF THAT IS SO , WHY CANT WE ALL HAVE ACCESS TO "FIDDLED" MORTGAGES, JUST LIKE TONY BLIAR DID IN ORDER TO BUY HIS SEVERAL PROPERTIES COSTING £MILLIONS ?

• Posted by: EmperorMing • Report Comment

WRONG WRONG WRONG!

11.06.08, 2:53am

GoDron (Mugabe) Broones muppets at the GoDron (Mugabe) Broone Academy of mathametical truths, irrefutable facts and No More Boom and Bust bull dung does not accept any of these cock eyed rumours about mortgage misery, inflation, stagflation recession or any other malicious gossip about the state of Britain's Economic Turmoil under the stewardship of NuLabour.
Such rumour mongering is to become an offence under backdoor legislation and will be taxed, taxed and punitively taxed in accordance with the fundamental labour party policy of tax everything until the pip squeaks. So there!

• Posted by: kojak • Report Comment

WHAT MISERY?

10.06.08, 8:37pm

No more & bust,house prices will never go down it's a conspriracy to say they will what's there to worry about!
Everyone is going to live happily ever after,they've brought their property,it's paid for don't worry be happy.

NOW BACK TO REALITY....AS I HAVE SAID BEFORE IN COMMENTS ,DR JEROME CORSI PHD SAID ON THE ALEX JONES RADIO SHOW ON AUGUST 14TH 2007 THIS IS A GLOBAL ECONOMIC CRASH WHICH WILL LAST SEVERAL YEARS.HE ALSO SAID IT IS BEEN ENGINEERED THIS WAY BECAUSE OF GLOBALISM!
DON'T JUST TAKE MY WORDS AS GOSPEL SEARCH THE WEB FOR THE RADIO SHOW BECAUSE I THINK PEOPLE NEED A DOSE OF REALITY! ps..HE SAID AN AWFUL LOT MORE ABOUT WHAT IS GOING ON.SOMETIMES IT HURTS TO TELL THE TRUTH!

• Posted by: Serious • Report Comment

HALIFAX BIGGEST MORTGAGE LENDER PAYING 10% ON A DEPOSIT ACCOUT!

10.06.08, 4:20pm

it's not rocket seince to work out how bad things are when the county's biggest mortgage lender, Halifax/Bank of Scotland is pay 10% on it latest saving account.

Min £25.00 per month by Direct Debit and has to be paid in for at least a year.

Tells one everything where the property market is going - down the tubes.

• Posted by: Judgemental • Report Comment

SO WHAT ARE THEY WAITING FOR - SELL SELL SELL

10.06.08, 3:57pm

Facts and hard facts at that have to be faced, the world has been living too well, in particularly the British and Americans.

I have said previously house prices will fall by 40% from current levels by 1 November 2008.

A spell, probably 10/15 years of belt tightning and austerity is required. Less speding on credit, of money folk do not have or think they have in bricks and mortar.

My advice, sell and sell quickly. If your house was valued at say £250,000.00 put it on the market now at £190k and you might get a bite or two, but don't hold your breath.

Don't think it will go back up - not in anybody's lifetime within the next 50/60 years.

During that time fuel and food prices are going to increase year on year.

We are into a new world order and it's going to become very tough and harsh.

• Posted by: Judgemental • Report Comment

ITS A MUGS GAME

10.06.08, 3:23pm

Buying into an over-priced property market is a mugs game.
When is it over-priced?
When the price as a multiple of income is way too high.
With houses at an average of nearly £200k, that means nearly 8 times average income.
That is a guaranteed crash.
The banks know it.
The government knows it.
Still they did nothing, because it made them popular, and big bonuses.
Many young people are going to suffer, and will feel conned by banks, agents, property porn programmes and government.
Who can blame them if they throw the keys back, and who's running this country...Sooty and Sweep?

• Posted by: stevewo • Report Comment