January 2016 saw many of the top stock exchanges around the world decline sharply. Investor confidence at the start of the year was distressingly low. A number of outside factors have been playing upon the world investment market, and having a negative effect on confidence in the stock markets. Firstly, as the price of oil continues to plummet, many large petroleum multinationals have had to lay off workers, which has in turn affected the share value. The possibility of a so called Brexit, where the United Kingdom may vote to leave the European Union has been doing little to help the situation. The EU has cut interest rates and now UK banks are following suit, leading to record low mortgage rates. Despite the economic uncertainty, would ordinary people be able to take advantage of this situation? Is it now time to remortgage?
Credit Crunch 2008 Redux?
In 2008, the UK bailed out their top High Street banks after the United States sub-prime crisis across the pond. The Brits struggled with mis-sold PPI lawsuits and even changed their financial regulatory agency. Some warned that the entire Capitalist system was in danger.
Unfortunately, some commentators at Davos, such as Billionaire George Soros, compared the “2016 start to the 2008 Credit Crunch.” He warned that if fundamental problems with the banking system were not fixed in 2008, they could re-emerge down the road. Consumer and business spending are starting to fall as worries continue about the economy’s strength.
Bank of England Cuts Rates
“The Bank of England has cut interest rates for the third time in four months in a new effort to insulate the British economy from the slowdown in the US.” The UK hopes to prevent the repeat of the 2008 meltdown in 2016 by making capital readily available.
But didn’t the UK government fix the 2008 banking problems?
The Bank of England’s “nine-member Monetary Policy Committee voted to shave another quarter-point off the official cost of borrowing, taking it from 5.5% to 5.25% – its lowest level since October 1999.” The deputy director general at the British Chambers of Commerce David Sears said: “With business already planning to reduce output, this will bring a boost to confidence and add further insulation against the US slowdown and the wider impact of foot-and-mouth.”
UK Banks Follow Suit
“The Halifax and HSBC banks immediately announced 0.25% cuts in their variable mortgage rates.” Experts believe that this could be a “pre-General Election boost” for homeowners. Homeowners might be able to remortgage, the lenders will sell more loans and the government will see an uptick in economic activity. Everyone wins.
Taking Advantage of the Situation
Now might be the best time to remortgage because the interest rates are at record lows. For a mortgage lasting decades, even an infinitesimal drop in rates can save you a lot of money.
Contact a remortgage lender who will give you the lower rates established by the favorable Bank of England policy changes. These may or may not be around after the election. If you are planning on remortgaging your home, ensure that you are fully prepared with the facts about what you can and cannot afford. Be sure to take full advantage of the many online financial tools to see if you can save money with a remortgage today. Saving money on housing has just gotten easier in the United Kingdom.
The important thing to remember is that to be able to take advantage of market uncertainty requires you to have access to a great deal of information. Luckily, there are a great number of consumer advice websites, designed to inform the public with regards to the financial markets and the housing market. Be sure to have a look at sites such as MoneySavingExpert.com or the Mortgage Advice Bureau to ensure that you get the best possible deal.