Nothern Rock ,any protest sites you know of ?

[V4NT0M]

Any protest sites to what? You having negative equity?!

 

[Royal Fleet]

Well, I'm not really bothered about going onto the SVR - let me explain.

I took a tracker out July 07 which was +0.75% on the BoE base rate - that put my payments at around £875 a mont. Now the rates have dropped significantly, I'm paying £668. The deal runs out July 09 so I have worked out that over the two years I'll have saved nearly £2k.

Now, as I borrowed 95% and house prices have dropped I'll be in negative equity (not that it matters - I'm not planning on selling) so I wont be able to re-mortgage so I'll go on the SVR, which is currently 5.5% with my lender. Bizarely, this works out at £850 a month - so it's still less than I originally took the mortgage out at. If I could afford £875 at the start, I'll have no probs with £850.

When house prices pick up and more mortages become avail, I'll assume interest rates will rise again and I'll be in the ideal position to snatch up a good fixed rate deal - I'm quite happy about the situation.

I know some people that took out fixed rate deals that are higher than the SVR their lenders are currently offering! Now that would annoy me!

I am in a similar situation, I am on a tracker with Nationwide which is Base Rate less 0.07% (I paid a reasonable fee), and my payments have gone down from £1150 to £750 a month. When the deal ends next October, I will go onto the SVR, which would still mean paying less than I did originally.

 

[peige]

I fell into this hole last month, coming to the end of my fixed term of two years with Northern Rock and now being on SVR.
I can afford this just about, the recent drop in Northern Rocks SVR means its not so bad and it still works out cheeper than renting the same property. The twist being that I will be hard put to remortgage it as the properties value decreases.

 

[dowie]

Now i know I may be peeing in the wind but it's the last point that really gets me , I am a higher rate tax payer and I am basily getting shafted at both ends .

Has anyone you guys know of taken any action or is there a Webb Link you know of where I can discuss this with any other people in the same situation ?

You probably are peeing into the wind there mate, unless their T&Cs oblige them to follow BoE rate cuts then I don't think you've got legal grounds for complaint.

As for being in negative equity it isn't their fault you personally chose to buy at the top of the market.

 

[Admiral Huddy]

Can't add any more to what has already been said.. but welcome to personal finance. As previosly said, it's not NR's or any other banks fault that your property is less now than what it once was and you are in negative equity.

People tend to forget the bleaker times when things were so good a few years back. Based on what happened during the early 90s, people and the lenders should have been more cautious.. We all saw this coming.. we had numerous threads here over the last few years asking "When is the housing market going to burst"? etc. . . so it was clearly on peoples minds.

 

[Bald-Eagle22]

Can't add any more to what has already been said.. but welcome to personal finance. As previosly said, it's not NR's or any other banks fault that your property is less now than what it once was and you are in negative equity.

Yep make your right there Huddy , all I can do know is overpay and get back into positive equity .

Funny thing is the day after the Valuer/Surveyer came round I called him and we had a long chat on the phone ( he had nothing else on that day ).

Countrywide origonaly did the valuation in late 2006 on instruction from the NR . When i applied for the new mortgage with Nationwide again Coutywide were appointed a the Valuers/Surveyers but it was subbed out to small local firm to do.

He told me that since Countrywide had done the origonal Valutaion 2 years prior it had already been marked down as a prior overvaluation and now a down valuation when he recieved the intial instruction to go and value it , this was before he even saw the property.

Were Coutrywide trying to hide something , have they had any legal action taken prior to this ? It all just smelt fishy to me ?

 

[Admiral Huddy]

Speaking from experience of having negative equity from the 90s, sit tight on it if you can.. When I needed a bigger home for a growing family, I bought a second home for a whilst they were cheap. I sold the flat later when things recovered and made a profit. In otherwords, I hedged my otherwise unfavourable situation. I'm not saying you should do this, but I'd not panic because they will recover, it's just timing. I had to wait 8 years.

 

[Deleted member 66701]

As for being in negative equity it isn't their fault you personally chose to buy at the top of the market.

I love it when people say this thereby implying they shouldn't have bought at that point. Can they please let me know where they got their crystal balls from as I'd like one.

 

[Dolph]

I love it when people say this thereby implying they shouldn't have bought at that point. Can they please let me know where they got their crystal balls from as I'd like one.

Mostly, they are the people who were claiming that a house price drop would be beneficial for people (thereby ignoring the likely reasons why it would occur) and were saying the same thing for at least 5 or 6 years that it would happen within the next year...

 

[dowie]

I love it when people say this thereby implying they shouldn't have bought at that point. Can they please let me know where they got their crystal balls from as I'd like one.

I love it when people read your opinion then automatically assume that you hold another entirely different one. I've said nothing at all about whether he should have known the market was topping out but simply that it wasn't NRs fault that he chose to buy at that time. Over leveraging yourself to the point where a small downward movement in the market puts you into negative equity isn't a good idea.

 

[Stretch]

who said anything about losing a home? negative equity really isn't the end of the world.. the only result at the moment is I'm stuck with northern rock (in fact to be honest I'm not in NE I have about 10-15% equity but its disappearing fast no doubt as are alternative mortgage products which is mainly my point, in a functioning mortgage market there would be no issue)

also what has being a higher rate tax payer got to do with anything? the home budget is the home budget, it works fine now but there's been a heck of a lot of stress over the last year being threatened with 7.49% and now being stuck at the top end of the mortgage market.

Err, I was referring to the OP.

 

[Le_Petit_Lapin]

You are aware that Northern Rock, as a Nationalised bank is not allowed to be competitive under Euro legislation.

Why? That's a bit stupid isn't it?

 

[scorza]

it wasn't NRs fault that he chose to buy at that time.

However it was NRs fault that they lent him the money to buy at that time, and therefore they are partly responsible for the situation. IMO looking to make a quick repossession is repeating the short-term mistakes of the past and I'm glad the government has done the right thing in pressuring banks and building societies to lower their SVR rates since the OP.

 

[Rich_L]

Why? That's a bit stupid isn't it?

It's EU competition, companies are supposed to be on a equal footing across the EU to enable them to compete fairly, if a state gives resources to a company then it gives it an unfair advantage over other member states.

Although that said, it's pretty much gone out the window at the moment, for example the fact that, although unsaid, the government appears to be guaranteeing all retail deposits could be seen as giving state aid to the whole UK banking industry.

All pretty complicated, there are arguments over what constitutes 'state aid' too - whether changing regulations, i.e. tax breaks or suchlike is 'state aid'.

 

[SKILL]

However it was NRs fault that they lent him the money to buy at that time, and therefore they are partly responsible for the situation. IMO looking to make a quick repossession is repeating the short-term mistakes of the past and I'm glad the government has done the right thing in pressuring banks and building societies to lower their SVR rates since the OP.

Yes the banks are partly to blame, but no more than either the FSA/Government/BOE and the actual borrower, all share an equal blame imo.

Repossessions, is it really smart to give someone who cannot afford to pay back a loan even longer to rack up additional interest and also for the asset to devalue more and more?

Obviously each case is different but I can imagine a lot of cases will end up being repossessed anyway, but having even more outstanding on the mortgage after the property has been sold than if they were just repossessed after 3 months...

As for lowering SVR, not 100% sure where I sit on this one, on the one hand generally it's the worst off on SVR, so any help is good, but by lowering SVR the banks also need to make savings elsewhere, such as savers getting lower rates, and that's not exactly a great idea...