Bank was split over rate rise
February 22, 2007 by admin
Filed under News, News-Loans
The recent freezing of interest rates caused a split within the Bank of England, with two Monetary Policy Committee (MPC) members voting in favour of a rise.
Minutes of the meeting in February have revealed that the vote was split 7-2 in favour of freezing rates but the divide means that the future for borrowers remains uncertain.
Those with a mortgage, credit card or loan could still see interest rates rise, with many people likely to suffer as a result if they do not have the financial clout to withstand another increase.
MPC members decided to wait and see what effect the previous three rate rises would have before moving ahead with another.
“It would take some time for the full effects of the past tightening to be seen. It was difficult to judge whether, and if so by how much, policy might need to be further tightened to keep inflation on track to meet the target,” the minutes read.
The previous rises came in quick succession, with rates jumping from 4.5 per cent in August to 5.25 per cent in January.
It appears that interest rates are likely to rise again in the coming months as the MPC attempts to bring down inflation which is currently running well above the government’s target of two per cent.
Repossessions grew in 2006
January 31, 2007 by admin
Filed under News, News-Mortgages
More people had their homes repossessed as 2006 drew to a close, according to the latest statistics.
The Council of Mortgage Lenders (CML) has released its statistics for the year and they do not make good reading for people struggling to keep up with their mortgage repayments.
According to the CML, 8,860 homes were repossessed in the final six months of 2006, compared to 8,140 in the first six months. The reason for the rise is being put down to increased interest rates and the CML is expecting more repossessions in the coming years.
The organisation is predicting that things will continue to get worse for homeowners, with an expected 19,000 repossessions in 2007 and 20,000 in 2008.
Despite the apparently bleak figures, the CML points out that the 8,860 repossessions at the end of 2006 was fewer than had previously been predicted.
“The arrears picture at the moment is fairly complex,” commented Michael Coogan from the CML. “On the one hand, the wave of problems caused by previous interest rate rises has now worked through, so recently arrears levels have fallen.
“On the other hand, interest rates are rising again, and payment shock may be an issue for some this year as their existing fixed or discounted deals expire.”
Those considering taking out a mortgage are advised to borrow within their means and ensure that they have enough financial clout to deal with any large interest rate rises that may come up in the future.
