Property News > Low, Low, Low!

Low, Low, Low!

The Bank of England announced on Thursday 4 December that another one per cent would come off the base rate, bringing rates down to two per cent, the lowest ever in the Bank's history.

Whilst borrowers will undoubtedly be delighted at this news, savers and those with pensions are understandably less enthusiastic. In real terms, they are seeing a reduction in their savings as the interest rate drops below the rate of inflation, leaving them with a deficit. Shopping around for the best savings rates is more important than ever, but if your money is tied up in a bond or fixed term investment you could be looking at the value of your fund with horror, especially if your money cannot be moved without penalties. If you are lucky enough to have an investment where interest rates are fixed then there is no problem, but where returns are linked to stock market performance you will see the value of your investment seriously impacted.

Lenders are certain to pass on the rate cut to borrowers but in varying degrees due to the need to balance the demands of mortgage holders with the need to attract and retain savers. There will be differences between standard variable rate mortgages and other types of deals. Some people are finding out for the first time that their tracker mortgage has a clause that allows lenders to stop reducing the rate when the bank rate falls below a certain level; in other words, the tracker stops tracking!  Check the wording of your mortgage agreement to see if this applies to you. 

House price falls have slowed slightly, whilst continuing their downward trend. More worrying is a report by the Council of Mortgage Lenders that indicates a rise in evictions due to repossessions. At the end of November the Council reported a 15 year high with figures that equate to 120 people being evicted from their homes every day. The CML predicts that the situation will deteriorate further during 2009, even if lenders take a more understanding approach to their customers' needs.

Repossession, and the threat of repossession, is stressful and difficult to manage. The effects can be far reaching, lasting for many years after the repossession has taken place. Anyone who faces the possibility of having their home repossessed should explore all the options before making any decisions. It is tempting to feel helpless at such a time and be carried along by the tide of events, but always ask for advice from the agencies that are there to assist. Unlike other less reputation organisations, Property Rescue recommends that you do this before you take the important step of allowing your home to be repossessed or selling up. Property Rescue gives you a guarantee that they will buy your home, but also provide you with all the facts so that you can make an informed, independent, decision, without pressure.

For information and a free, no obligation valuation of your home, call Property Rescue today.


 

The Bank of England announced on Thursday 4 December that another one per cent would come off the base rate, bringing rates down to two per cent, the lowest ever in the Bank's history.

Whilst borrowers will undoubtedly be delighted at this news, savers and those with pensions are understandably less enthusiastic. In real terms, they are seeing a reduction in their savings as the interest rate drops below the rate of inflation, leaving them with a deficit. Shopping around for the best savings rates is more important than ever, but if your money is tied up in a bond or fixed term investment you could be looking at the value of your fund with horror, especially if your money cannot be moved without penalties. If you are lucky enough to have an investment where interest rates are fixed then there is no problem, but where returns are linked to stock market performance you will see the value of your investment seriously impacted.

Lenders are certain to pass on the rate cut to borrowers but in varying degrees due to the need to balance the demands of mortgage holders with the need to attract and retain savers. There will be differences between standard variable rate mortgages and other types of deals. Some people are finding out for the first time that their tracker mortgage has a clause that allows lenders to stop reducing the rate when the bank rate falls below a certain level; in other words, the tracker stops tracking!  Check the wording of your mortgage agreement to see if this applies to you.

House price falls have slowed slightly, whilst continuing their downward trend. More worrying is a report by the Council of Mortgage Lenders that indicates a rise in evictions due to repossessions. At the end of November the Council reported a 15 year high with figures that equate to 120 people being evicted from their homes every day. The CML predicts that the situation will deteriorate further during 2009, even if lenders take a more understanding approach to their customers' needs.

Repossession, and the threat of repossession, is stressful and difficult to manage. The effects can be far reaching, lasting for many years after the repossession has taken place. Anyone who faces the possibility of having their home repossessed should explore all the options before making any decisions. It is tempting to feel helpless at such a time and be carried along by the tide of events, but always ask for advice from the agencies that are there to assist. Unlike other less reputation organisations, Property Rescue recommends that you do this before you take the important step of allowing your home to be repossessed or selling up. Property Rescue gives you a guarantee that they will buy your home, but also provide you with all the facts so that you can make an informed, independent, decision, without pressure.

For information and a free, no obligation valuation of your home, call Property Rescue today.

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