Article(s) associated to this keyword
- Struggling Mortgage Owners Can Defer Mortgage Payments For Two Years
- Libor Stays High as Base Rate Cuts are Forecast
- UK Government Rescue Plan for Banks
- Hopes Rise for a Rate Cut
- Markets Face Meltdown After Rescue Plan Rejection
- Lehman Brothers Fails and Merrill Lynch Is Taken Over
- Fresh Hope For First-Time Buyers
- Recession Looms Says Economist
- Good News Among The Gloom
- Buyers Ask For Large Discounts
The Government is launching a new scheme to help homeowners where their income has been hit by redundancies or loss of overtime payments.
Although the three-month Libor rate is remaining frustratingly high, there are expectations for the base rate to be cut again this year and throughout 2009, as forecasts are for inflation to come down, maybe as low as 1% in 12 months time.
The UK Government is to inject £50bn worth of capital into the banking system in an attempt to get the banking system moving again. In return the Government will receive preference shares. So far, eight banks are listed as taking part in the plan.
With fears for a recession now overtaking fears for inflation, expectations are rising in the City for a Bank of England base rate cut this week. Inflation is expected to peak soon, but the economy is in dire need of a boost. A rate cut should help variable mortgage rates.
The US bail-out plan for banks was rejected on Monday. As a result financial markets around the world went into free-fall. More banks went under, and others are expected to follow. President Bush will make another attempt at a rescue plan later in the week.
Lehman Brothers has filed for bankruptcy in the US, and Merrill Lynch is being taken over by Bank of America after a weekend of upheaval in the US. Stock Markets suffered on Monday as a result.
Speaking yesterday, Graham Beale stated that house prices will continue to fall and that the average price may drop to £140,000. Whilst this is bad news for homeowners it will also mean that many others will finally be able to afford their first home.
With Britain’s GDP growth now at zero, Capital Economics is forecasting a recession this year and next. The Treasury takes a more optimistic viewpoint. Inflation is set to come down in 2009.
Bad news for inflation forecasts and gloomy predictions for further banking problems abound. However, boom and bust has always been part of the economic cycle. Despite the misery, some lenders have been cutting their fixed mortgage rates in recent weeks.
With some sellers desperate to sell, buyers are asking for discounts - some as much as 20% - according to a Bank of England report. Meanwhile, news coming out of the Bank is that their fears for inflation have eased in the light of falling oil prices, and the next interest rate movement could be downward.
