Archive for 2009

Readers should be aware that The Abbey has recently removed over 7,000 solicitors from its list of approved members. The move came as a complete surprise to the solicitors who were removed. Whilst we as customers pay the solicitors conveyancing fee, the mortgage lender normally lets the solicitor handle its side of the conveyancing process. For customers who are setting up an Abbey mortgage and attempt to use one of the solicitors who has been removed, they will be asked to pay for a different solicitor to cover the bank’s interests. The Law Society, which represents solicitors, is meeting with the Abbey to raise its concerns with the bank. For the moment, it would be wise for potential Abbey customers to check whether their intended conveyancer is currently on the Abbey’s list of approved solicitors.

The Bank of England has reduced the base rate to a new all time low of 0.5%. The further drop (from 1% in February) was widely expected. The Bank has also promised to use £75bn of funds to buy assets from the government and other banks. This will increase the amount of money in circulation, hopefully making lending more easily accessible.

The Bank of England has now cut the base rate to 1%, to bring the rate to a new historic low. This is of little help to mortgage holders though unless they are on variable rate mortgages and the drop is passed on by their lender. It is estimated that around one third of the 12million mortgage holders are on variable rates. It will of course not help the remaining 8m stuck on fixed rate deals.

The Bank of England has announced that this month’s drop in interest rates will be 0.5%. This brings the base rate to 1.5%, which is its lowest level since the Bank of England was formed in 1694. While a cut would normally be great for mortgage holders, in the current economy, many banks are not passing on the full extent of the rate cuts to borrowers. The best deals are also not available to people who do not have a 25% deposit. The best 75% Loan to Value loan fixed rate mortgage available (Cheltenham & Gloucester) has a rate of 4.29, while the best 90% Loan to Value fixed rate mortgage (Britannia) is 6.09%.