Sunday 15th September News Headlines

PF

Mortgage rates on the rise.  Although Mark Carney, the Governer of the Bank of England has reassured households that the bank rate will stay at 0.5% until at least 2016 – when he expects unemployment to drop to 7%, Market analysts disagree.  Many think that the current positive economic news could push up rates in 2015 and even as early as next year.   Advice from various analysts:  Overpay, Fix now (if you still on lenders SVR)and Break out of a fix, Times Money p 3

Property

Banks and building societies could derail the governement’s Help to Buy scheme.  The scheme is due to start in the new year and with only 5% deposit you can buy homes up to £600,000.  Yet lenders are warning privately that they plan to stick to their current lending criteria and would only offer such large mortgages on much cheaper properties, Times Business p 3

First time buyers are flooding back to the housing market as economic conditions improve, alongside fears that low mortgage rates won’t last and a fresh housing bubble will push house prices beyond reach, Observer p 49

Fears grow as property prices in capital race to new highs.  Paul Ballew – global chief economist for credit rating group Dun & Brandstreet says “A London crash could stall the economy.  It’s a big enough asset class to matter.  The ripple effects of a key sector go throughout the economy in so many ways’, FMOS p 79

 

Economic

Inflation is expected to fall to 2.7% figures out this week will show a decrease from 2.8 in July and 2.9 in June.  This is largely due to smaller increase in petrol prices.  Whilst it is still over the 2pc target for inflation, any reduction will be seen as a positive step for growth. Times Business p 2, Tel B2

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