There is a problem in the property market that few are talking about. It is the problems of sub prime. Not the USA which we have heard loads of, it is the problem in the UK. There are hundreds of thousands of people on sub prime mortgages. In the main the rates they pay are linked to Libor (London inter bank offered rate.) In the past this was close to Bank of England Base Rate.
No Longer.
LIBOR is at 6.58% this means that subprime borrowers have had an increase in rates of 0.83% while BOE rates have stayed the same. On a 150K mortgage that is an increase of £104 a month while rates have stayed the same.
Oh dear.
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