Property Articles

Over the last few days, there is a lot of hype about Northern Rock. Here are some details on the situation:

Due to the recent issues in the US mortgage market, NR recently decided, for safety’s sake, to open up what’s effectively an overdraft facility with the Bank of England. Due to the problems in the US market, the banks are unwilling to lend each other money and NR’s business model is based on borrowing money from other financial institutions.

Because of the media coverage lead to panic and people are trying to get their savings out.

As a result of these recent events, we have already seen some banks/building societies increasing their rates although the Bank of England has kept the base rate unchanged.

Almost everyone is predicting that getting mortgages is going to become more difficult and the cost of the mortgages are going to go up. However, very few are predicting a housing market crash citing the huge demand for property outweighing the supply at the moment.

We would strongly recommend any investment landlords who have fixed rates mortgages that are ending their period before the end of 2007 to seek professional financial advise as soon as possible.