Chris U’Dell

Despite Gordon Brown’s recent efforts to kick start the economy the headlines in this weekends edition of FT Weekend read “Brokers warn of further rises in mortgage rate“.

According to the FT brokers expect the two year fixed rates to increase in the coming weeks and that consumers will not benefit for at least 3 months. The biggest evidence of this is HBOS move to withdraw most of their mortgage range and “immediately repriced some rates 60 basis points higher”

With the cost of borrowing already much higher than this time last year, I have no doubt this will put increased pressure on many customers. If Mr Brown’s £50 billion injection does not have an impact then the writing on the wall is clear. Increasing difficulty in obtaining a mortage, increasing difficulty in making the repayments leading to increasing volume of repossessions.

Of course the situation will not be improved by last weeks High Court ruling that bank charges can be review by the Office of Fair trading. The FT reported that some consumer groups have argued that banks may have to repay around £10bn of fees which they have charged to their customers over the previous 6 years. A figure that will not encourage them to reduce their cost of lending!

http://www.ft.com