The BBC alerted me to something an hour ago. This happens and I initially read the article with a shrug like ‘who cares?’ But few moments later the coin dropped and I was all about the WTF setting. You see, the article ‘Mortgage deals withdrawn in record numbers over rate rise fears’ (at https://www.bbc.co.uk/news/business-63061534), as said, I initially shrugged when I saw “Lenders withdrew a record number of mortgage products overnight, according to analysts, as they grappled with the prospect of rising interest rates”, it was always going to happen, but the awakening happened shortly thereafter when I saw “Moneyfacts, a financial information service, said that 935 mortgage products, around a quarter of the total, were taken off the shelf.” Are you effing kidding me? 935 mortgage products? How can anyone get a clear view on that many products? How can anyone see the forest through the trees in that setting? And with “lenders are withdrawing mortgage deals in order to re-price them” chaos gets a free rein. Is anyone clearly investigating these products? And that is before we get to the repricing issue. Now, I get it, things get repriced, events make that essential, but when was a mortgage holder EVER contacted because his product has been lowered in price, and there would be a windfall that would be shown in a lower monthly rate, when did that EVER happen? My guess is never. And we haven’t even touched on the crazy part. This is seen with “A total of 2,661 mortgage products are still available – but that is half the number that were on sale at the start of December last year when interest rates started to rise” this means that the people are confronted with 3600 mortgage products, this sounds way too fishy to me and no one is asking questions. I get that there are elements that make it essential to have a few products, but this is enabling a wild west of mortgage consultants and that ain’t right. So when I see “Brokers are reassuring those who already have a mortgage, or an agreement for a new mortgage, that they will be unaffected for the time being. However, when they come to remortgage, they are likely to find monthly repayments have become a lot more expensive” There is a clear setting here, mortgages are frozen for a time and this time tends to be 3-5 years, so after that time remortgage will have an impact and with the housing market reducing in price by a speculated 10% that will be a very costly event for a lot of people. And that setting is made with “When the family bought their house in Manchester in 2018, they fixed the mortgage at 2.05% for five years with monthly payments of £927, Mr Ahmad said.
Usman, a 33-year-old self-employed courier, said if he took out a fixed rate mortgage today he would be facing monthly payments of more than £1,250 a month” Yes there are a few sides here and that is not all on the people. The first is what property did they buy? Did they leave space for situations that they could not foresee? The second part is the 2.05%, that is below currency valuation, a larger setting that influences everything and that is before you realise that all these events are setting their mortgage at almost 30% higher and optionally even more in 2023 and 2024. That whilst they lose 10% of their value makes it a rather large issue. And in this I have little faith in the ‘calming’ voice of Rachel Springall from Moneyfacts. We might be given “Various lenders have been very vocal that their decision to withdraw products is a temporary measure, amid the uncertainty over interest rates” but one persons temporary setting is speculation, we just do not know what will happen and the fact that there were over 3500 mortgage products was a idiotic setting to say the least. Yes, it is personal ad there might be all kind of reasons but go to ANY bank, how many mortgage products do they have? They will not give you that 3500 list, will they and banks are still the centre piece in any mortgage and that is now becoming a much larger play. Andrew Wishart, senior property economist at Capital Economics gives us “The rise in market interest rates that has already happened will push up mortgage rates to at least 6% and reduce the size of loans that lenders can offer” if that is true, Usman Ahmad’s house is a cooked setting, from 2.05% to 6% implies a cost rise of almost 300%, he might want to get out whilst he has a chance because this is about to get really ugly in the UK. And whatever short term someone hands them is a loaded cannon, it’s like walking backwards in a minefield thinking that you are more safe that way, I never saw that reality and you should neither. I reckon that a larger investigation is needed the fact that the BBC does not think this to be important is their loss, but here do you see the stage where there are over 3500 game consoles, no business can set that stage and survive, the fact that mortgages got away with it makes me wonder if any of them had the welfare of house buyers in mind. I have my doubts here.