House prices bottomed ?

kennyboy66_2

Graham_Devon wrote: »

My thoughts on mortage rates vs BOE rates.

At the moment they are very much above the BOE rate and rising.

I don't believe this is a temporary measure, I see it as a measure over the medium term, maybe a decade.

When we reach 5% BOE rates, I can see mortgage rates being 9-11%.

Why? Simple. When the BOE rates go up, and therefore SVR's go up, more people will become reposessed, and the bank has to sell off an asset which may not cover the outstanding mortgage, meaning the rest of us have to pay higher rates to cover their losses. The worse the situation gets, the higher the mortgage rates go etc.

We may have seen 15% BOE rates in the past, but mortgage rates were around 13% I believe. This time, we may see say 8% BOE rates, but mortgage rates at 12-15%.

Just my thoughts really, based on credit card rates all shooting up, loan rates shooting up etc. And this is based on the LIBOR rate and BOE rate falling. Lot of losse's to make up for.

If that bank charges case is succesful, thats millions of pounds more losses for the banks, so this could have effect too. The more losses they take, the higher the price we all pay.

Does it not occur to you that such margins or 4% to 7% ABOVE base rate would not encourage other competitors into the market ?
At such collossal margins we would probably be getting our mortgages from Nestle, Walmart or one of the Utility companies

Thrugelmir

kennyboy66 wrote: »

Being a little sad, I checked my mortgage statement from 2004 when I was last on a SVR with the Nationwide, and the difference between base and SVR was 1.79%.

and what is Nationwide's difference between SVR and BOe base now?

Graham_Devon

kennyboy66 wrote: »

Does it not occur to you that such margins or 4% to 7% ABOVE base rate would not encourage other competitors into the market ?
At such collossal margins we would probably be getting our mortgages from Nestle, Walmart or one of the Utility companies

And that hasn't happened in the loan and credit card market, why?

The supermarkets etc are only resellers of products.

StevieJ

Thrugelmir wrote: »

and what is Nationwide's difference between SVR and BOe base now?

So you think it is normal now?

StevieJ

Thrugelmir wrote: »

".

Pure speculation I know.

Correct

Thrugelmir

Graham_Devon wrote: »

And that hasn't happened in the loan and credit card market, why?

The supermarkets etc are only resellers of products.

Tesco are moving into banking. Though only in a small scale way. Cherry picking a selective part of the market. Though they have had a tie up with a bank for a while so have taken that operation over.

On the scale that Kenny is suggesting is fantasy dreaming.

Thrugelmir

StevieJ wrote: »

So you think it is normal now?

Why not? Nationwides profits for 2008 were down 50% due to the amount they were required to pay for FSA levies. They need to restore bottom line margins to increase capital reserves. Nationwide does not borrow on wholesale markets. Relies on members deposits for funding.

Graham_Devon

Stevie, how do YOU suggest they regain losses aswell as pay bailouts back? Aswell as do away with QE?

Rather than just picking holes and going personal, tell us how YOU think they are going to do everything they need to do to stabalise and lend in a risky market.

StevieJ

Thrugelmir wrote: »

Why not? Nationwides profits for 2008 were down 50% due to the amount they were required to pay for FSA levies. They need to restore bottom line margins to increase capital reserves. Nationwide does not borrow on wholesale markets. Relies on members deposits for funding.

The world economy will self correct, when it does the banks from across the world will seek the highest returns, competition will return and it would not surprise me if mortgages in the future were supplied from The Peoples Bank of China at BR +1%.

Graham_Devon

StevieJ wrote: »

The world economy will self correct, when it does the banks from across the world will seek the highest returns, competition will return and it would not surprise me if mortgages in the future were supplied from The Peoples Bank of China at BR +1%.

Self correcting is a different issue to regaining losses and paying back debts.

Self correcting is done once the problems are dealt with. So you are simply skipping the problem stage here.