I was right in one of my predictions last week, but for the wrong reasons. I said there would be a stamp- duty-induced mortgage boom. There’s a boom OK, but it’s interest-rate-hike induced. Immediately after the Kwasi-Budget, one lender’s applications soared from their average of 300 per day to 1900, as the more astute rushed to grab the fixed rate deals still available. By the time the rest of the mortgaged country caught on, most were so swamped they had to close their doors. The pressure on interest rates to go up is now not just to control inflation, but to keep some sort of value for the £ and entice at least someone to lend the money that’ll be needed to fund all the tax cuts. Many times a member of the older generation has said to me ‘don’t know they’re born, when we had a mortgage interest rates were 16% etc.’ Not sure it’ll get to that; but 6 or 7% is going be tough without some big pay rises.
““Sir Howard Davies should be ashamed” – brokers react to NatWest chair’s property ladder comments”
‘Just when bankers’ reputations have started to recover’ might be something of an exaggeration. The image of fat cats and their traders earning big bonuses while crashing the economy still endures and has been given further life and legs by the NatWest chairman’s ultimate out-of-touch-with-the-real-world comments.
