Posts Tagged ‘Credit crisis’
Sunday, April 20th, 2008
The London postcodes at greatest risk from the housing crisis was revealed today by the Evening Standard. Tens of thousands of home owners across the capital will be plunged into negative equity this year if property prices fall by 20%. People who have taken on huge mortgages compared with the value of their property will owe more than the building is worth. The worst hit would be buy-to-let investors who tried to cash in on the housing boom, according to analysis obtained by the Evening Standard. Below are the top 10 streets and London boroughs most likely to be affected. Find out more at thisismoney.co.uk.
Top 10 London streets most at risk:
Calderwood Street SE18
Erebus Drive SE28
Queenstown Road SW8
Woolwich Common SE18
St Saviours Estate SE1
Glashier Street SE8
Greenhaven Drive SE28
St John’s Estate N1
Great Dover Street SE1
Borough High Street SE1
Risk level by London boroughs:
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Tags: Buy-to-let, Credit crisis, Credit crunch, evening standard, house price falls, housing crisis, investors, London, Negative equity, thamesmead
Posted in Buy-to-let, Credit crisis, Credit crunch, Debt Management, Finance, Home loans, House prices, Landlord, Mortgages, Negative equity, Property Market, Property Prices | No Comments »
Tuesday, April 15th, 2008
Families already struggling to cope with the credit crunch face huge increases in food bills because of global shortages. Costs are rising faster than at any time since 1991 (when there was a recession driven by sky-high inflation and interest rates) and the average shopping bill is likely to go up by £600 a year. Added to the impact of higher charges for mortgages, heat, light, water, petrol and council tax, the average family is likely to have to find an extra £1,500 a year, just to stand still. Worldwide food shortages have been caused by increased demand from countries such as China and India, together with poor harvests linked to droughts and floods. A decision by farmers to turn over their land to the growing of biofuels is also a factor. While biofuels have been presented as the solution to global oil shortages, they are now contributing to a lack of food. Some countries have suffered food price protests, while a number of nations are imposing limits on exports to protect their own supplies. The big question for British shoppers surrounds the extent to which supermarkets and other retailers will pass on the price increases. While profits will suffer if they swallow the rises, sales will inevitably fall if they pass them on.
Tags: biofuel, China, Credit crisis, Credit crunch, food bills, food prices, food shortages, global shortages, India, inflation, oil shortage, retailers, supermarket
Posted in Consumer, Credit crisis, Credit crunch, Finance, Food crisis | No Comments »
Sunday, March 23rd, 2008
Several small building societies have been restricting or halting lending as a result of the financial turmoil. With lenders’ funds drying up, higher deposits are being demanded from first-time buyers. The Co-operative Bank now demands a higher deposit by cutting its maximum loan-to-value ratio from 95% to 90%. Bigger lenders, such as the Halifax and the Woolwich, have slightly increased the interest rates on certain tracker or fixed-rate deals, while making other deals available only to those able to put down a 40% deposit. The Cheltenham & Gloucester, part of Lloyds TSB, has also raised the interest rate charged on some deals. More than a million fixed-rate deals, typically lasting for two years, are due to expire in 2008, which will add to demand. As a result, the smaller building societies are withdrawing deals instead of being swamped by demand. Those wishing to move house are being told to act fast on mortgage deals as lenders are changing their deals frequently, sometimes several times a week.
Tags: building societies, Cheltenham & Gloucester, Co-operative, Credit crisis, Credit crunch, First-time buyers, fixed-rate deals, Halifax, higher deposits, Lloyds TSB, mortgage criteria, Nationwide, TSB
Posted in Credit crisis, Credit crunch, Finance, First-time buyers, Halifax, Mortgages, Nationwide, Personal Finance, Property Market | No Comments »
Tuesday, March 18th, 2008
Today, the US Federal Reserve slashed interest rates by 0.75% to 2.25% in a desperate attempt to prevent meltdown in the financial markets. The decision followed the weekend bailout of Bear Stearns, which was saved by rival JPMorgan Chase with the help of Fed cash. The shocking demise of Bear Stearns has prompted fears on Wall Street and in the City that the credit crunch could claim yet another high profile victim as lending between banks dries up. The Fed had previously cut rates by 1.25% to 3% this year alone and pumped billions of dollars into the markets. Although this has so far done little to restore confidence or calm. There are great concerns that the Fed and other central banks are powerless to solve the crisis. Pressure is now growing on the Bank of England and European Central Bank to cut rates, although both are concerned about rising inflation. Official figures released showed that inflation in Britain rose sharply in February from 2.1% to 2.5%, leaving the City split on the Bank of England’s next rate call.
Tags: Bank of England, central bank, Credit crisis, credit crunch european central bank, financial markets, money markets, Rate reduced, US Federal Reserve
Posted in Bank of England, Credit crisis, Credit crunch, Rate reduced | No Comments »
Thursday, March 6th, 2008
Borrowers with bad debts are getting better mortgage deals than first-time buyers without a deposit. The cheapest deal for a first-time buyer with good credit history but without a deposit is with Bradford & Bingley - 6.89% with £999 fee. But a sub-prime borrower with missed mortgage repayments (in the past year, one of which is in the last six months), could get a rate of 6.69% with a £995 fee with Chelsea BS. However, those with a 25% deposit could get a rate of 4.75% from First Direct with a £1,498 fee. A year ago, 27 banks and building societies offered 100% mortgages compared with just 11 today at much higher rates. As the credit crunch hits banks and building societies, first-time buyers have been left out in the cold.
Tags: 100% mortgages, Bradford & Bingley, Chelsea BS, Credit crisis, Credit crunch, credit history, cub-prime, First Direct, First-time buyers, subprime
Posted in Credit crisis, Credit crunch, First-time buyers, Mortgages, Personal Finance, Property, Sub-prime | No Comments »
Wednesday, March 5th, 2008
The Government is planning to use next week’s budget to introduce plans to grade all mortgages in a bid to kick start the wholesale money markets. Chancellor Alistair Darling is understood to be arranging the introduction of a new system under which all mortgages are graded, with the least risky awarded a gold standard ‘Kitemark’. Investors have been reluctant to buy mortgage-backed securities for fear they contain risky sub-prime loans and this has made it difficult for banks to remove mortgage assets from their books. It is hoped that by providing investors with greater reassurance about the quality of the loans they are taking on, it will make it easier for lenders to sell on mortgages to investors. The scheme could help re-vitalise the wholesale money markets and provide banks with access to cheaper funding, which subsequently could be passed on to consumers in lower mortgage rates.
Tags: alistair darling, Banking, Credit crisis, Credit crunch, Government, investors, kitemark, MBS, money market, mortgage rates, mortgage-backed securities, Mortgages, Sub-prime
Posted in Consumer, Credit crisis, Credit crunch, Finance, Government, Mortgages, Property Market, Speculation, Sub-prime | No Comments »
Monday, March 3rd, 2008
The Government has pledged £12m for a large-scale trial of a free personal finance service that will offer general advice on issues such as managing debt, budgeting, retirement planning and understanding financial jargon on a two-year trial. The “money guidance” pilot project was the main recommendation of the final report of a 14 month long work led by Otto Thoresen, chief executive of life insurer AEGON UK which proposed an impartial, sales-free, personalised advice service to help people better manage their money. The report also claimed that consumers could be more than £15bn better off if they had access to financial guidance over the next 50 years. Over the same period, it could save the government some £6bn through reductions in Pension Credit payments and other benefits and also make the financial services industry £5bn because they would benefit from lower levels of bad debt, a better relationship with consumers and a reduction in advertising and selling costs. The recommendations come at a time when Britons have raked up a record UK personal debt of £1.4 trillion and are increasingly feeling the effects of the credit crunch.
Tags: advice service, AEGON UK, budgeting, Credit crisis, Credit crunch, Debt Management, financial guidance, financial jargon, free financial advice, life insurer, money management, pension credit, personalised advice, pilot scheme, retirement planning
Posted in Consumer, Credit crisis, Credit crunch, Debt Management, Finance, Government, Pension, Personal Finance | No Comments »
Saturday, February 23rd, 2008
Lenders have completely pulled out of the 125% mortgage market as the credit crunch continues to bite. Birmingham Midshires Solutions said it was pulling its version of the product, which will lend people up to 125% of their property’s value, due to market conditions. The group had been the only provider to continue offering the deals after Alliance & Leicester, Abbey, Northern Rock, Coventry Building Society and Godiva Mortgages all said they were scrapping them earlier this week. Faced with only limited availability of funds, lenders are keen to concentrate on less risky mortgages, and the problem has been compounded by fears that house prices could fall. There are now just two mortgage providers who will advance more than 100% of a property’s value, with Scottish Widows offering loans of 110% to professionals only, while Dunfermline Building Society is offering 110% to professionals and 105% to graduates but only in Scotland.
Tags: 125% mortgages, Birmingham Midshires, Credit crisis, Credit crunch, Dunfermline Building Society, Mortgages, Scottish Widows, Sub-prime
Posted in Credit crisis, Credit crunch, Finance, House prices, Investments, Mortgages, Property, Property Market, Sub-prime | No Comments »
Sunday, February 17th, 2008
The government decided to nationalise Northern Rock today, abandoning a five-month attempt to find a private sector buyer for the ailing bank. “In the current market conditions we do not believe the two proposals deliver sufficient value for money for the taxpayer,” Finance minister Alistair Darling told a news conference. “So the government has decided to bring forward legislation to bring Northern Rock into a temporary period of public ownership.” The government will put forward legislation on tomorrow to take the bank into public hands — the first major nationalisation in Britain since the 1970s — and trading in Northern Rock shares was suspended.
Tags: alistair darling, Credit crisis, Credit crunch, finance minister, Government, legislation, nationalisation, nationalised, Northern rock, public ownership
Posted in Banking, Consumer, Credit crisis, Credit crunch, Finance, Politics, Stock Market | No Comments »
Friday, December 14th, 2007
For the past two weeks, the bank has been offering loyalty bonuses to savers and increased rates to a range of savings accounts. But on the other hand, it has withdrawn mortgages, loans, credit card, and increased borrowing rates to rediculous highs with huge arrangement fees. Obvious signs that its trying to recoupe some of its loses after its savers decided to match away with their money in toe back in October. It has since then borrowed more money from the Bank of England to the tune of £29bn. The move has pushed some of its savings products up the best buy tables and deterred mortgage brokers with fixed rates starting from 6.79% on 90% LTV with arrangement fee of £1,995. As a good loyal Northern Rock mortgage customer, I will have to match off too unless they sort this out.
Tags: Credit crisis, Loans, Mortgages, Northern rock, Savings
Posted in Banking, Consumer, Credit crisis, Credit crunch, Finance, Investments, Loans, Mortgages, Personal Finance, Savings | No Comments »
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