Friday, 20 April 2007

Can you feel it coming....

.....the next interest rate increase? It is coming down the tracks like a freight train.

The building societies certainly know what is coming their way in May. They are pulling fixed rate mortgages. Alliance & Leicester pulled its fixed-rate deals on Wednesday. The Halifaxhave just withdrawn the bulk of its two and three-year fixed-rate deals. Alliance & Leicester and the Portman, Skipton, Newcastle and Kent Reliance building societies have all pulled deals, while Northern Rock and The Mortgage Works have put their fixes on "withdrawal watch". In buildingsocietyspeak, this means that they will pull them any moment now.

Interest rates up; mortgage demand down; housing inventory up; house prices down. No more bubble, and a lot more trouble.

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