Landlord Basics

Government Owned Banks Fail To Act Competitively

Government owned banks may have been bailed out by taxpayers over 12 months ago, but many are still failing to offer property owners real competitive deals, according to a study by property website Moneyfacts.

Even with the Bank of England keeping the Base Rate down at a historic low of just 0.5% since last March, this lack of action by state-owned banks has prompted a growing division between taxpayer-funder banks and non-state funded…

Continuing in their research, Moneyfacts also discovered that the average 2 year fixed rate 75% LTV mortgage offered by government owned banks such as Cheltenham & Gloucester, the Halifax and Northern Rock is around 4.19% – far from the low interest rates that they should be offering considering the Bank of England’s decision to keep the Base Rate where it is for another month.

Analysing these figures, many property advisors feel that this lack of willingness to lend at competitive prices may have been spurred on by their increased desire to get out of government ownership. However, whilst this notion may be helping them to get out of debt, the individuals who are taking the brunt of this decision are the very same people who bailed them out in the first place: taxpayers.

Fortunately it is not all doom and gloom for property owners…

Many non-state funded banks are set to launch a series of competitive mortgage deals which will fundamentally help property investors and first time buyers alike to enter back onto the property market:

• There are now approximately 1,798 mortgage deals available across the property market
• 100% LTV’s and 95% LTV’s, although still small in number, are increasing in availability
• 85% LTV’s and 90% LTV’s have risen in popularity by 90% from this time last year, offering 489 deals

Related posts:

1. German Banks Supply 62% Of All Commercial Lending
2. More 90% LTVs For First Time Buyers
3. Buy To Let Lenders Soften Lending Criteria
4. 95% LTVs Return
5. Mortgage Confidence Grows 31%

Tags: Bank of England, first time buyers, property advisors, property investors, property market, property owners, property website

This entry was posted on Thursday, March 11th, 2010 at 9:32 am and is filed under mortgages, News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.