The LTI flow limit from the Bank of England is an immense barrier to many goals of politicians, and even the regulators themselves, which is ironic. Put a barrier against innovation in finance, you put a barrier against innovation itself! Society is connected, at least one of the points should resonate with anyone in the audience. - economic growth is depressed because the LTI cap locks up the housing market, a major part of GDP. - inequality would reduce without the LTI, because more people would have access to home ownership - more competition in the mortgage market, because start up innovators like Perenna would not be subject to restrictions aimed at the large lenders - more consumer choice, because different funding models like Perenna will introduce different mortgage products such a long term fixed rate mortgages - more productive finance, with the LTI limit stopping pension savings being channelled into the domestic economy through different funding models - the LTI limit is a barrier to wider adoption of retrofitting products, needed for our net zero ambitions - removing the LTI would help FTB own their homes, improving affordability - the LTI cap stops the development and introduction of mortgage loans that are appropriate for older people, hit by the cost of living and looking to borrow against their home - the LTI cap forces aspiring homeowners into the shadow economy through help to buy type products, in the end more expensive for borrowers, as well as increasing systemic risk Nobody denies leverage is a risk, but stopping leverage is a bigger risk. Leverage risk needs to be controlled, and other economies are doing that better without an LTI cap. As Tim Shipman wrote: “ .. we have been free to make our own mistakes, and boy have we made them” The Times Tim Shipman Jeremy Hunt HM Treasury Rt Hon Rachel Reeves MP The Conservative Party The Labour Party
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#FinanceFriday! 🏦 💸 What is the Bank of England Base Rate? The Bank of England base rate is a tool used by the Bank of England to influence the economy. This rate is essentially the interest rate at which banks can borrow money from the central bank. It plays a huge role in shaping the cost of borrowing (whether mortgages or smaller loans), and the return on savings accounts and ISAs. ❓ Why all the Hullaballoo about whether it's being Raised or Lowered? ⬆ Raised: In a nutshell, the base rate is increased to curb inflation. When the economy is growing too quickly and inflation is rising, a higher base rate can help cool down economic activity and bring inflation under control by incentivising people to save money (because they get more interest) rather than spend it. ⬇ Lowered: On the other hand, the Base rate is reduced to stimulate economic growth. Lower rates make borrowing cheaper, encouraging spending and investment when the economy is sluggish or in recession. 💰 🏠 So what's the Impact on Savings and Mortgage Rates? 💸 When the base rate is high, banks tend to offer better interest rates on savings accounts and ISAs, benefiting savers. On the other hand, a lower base rate usually leads to lower interest rates on savings, reducing the returns for savers. 🏚 Mortgage Rates: Mortgage rates also follow the base rate. A higher base rate typically results in higher mortgage rates, increasing the cost of borrowing for home loans. Lower rates make monthly mortgage payments cheaper. At the moment, inflation is just about under control, hovering around 2-2.5%, but it's not clear when exactly the right time to lower interest rates will be. There's a lot of speculation on if it will go up or down in September, so you might want to lock in an interest rate now to hedge your bets! #FinancialEducation #PersonalFinance #FinancialFeminism
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This week the Bank of England looks set to stick to tentative interest-rate cutting. A growing cohort of investors see a need for more aggressive action by the Bank. Harriet Ballard, multi-asset portfolio manager at Aviva Investors, says: 'If the BOE delays policy easing then the economy would decelerate quite notably, something that would suggest faster and deeper rate cuts later. We still see risks to the UK economy as household consumption remains sluggish, mortgage cost servicing is likely to rise, and the labour market is cooling'. Read more on Bloomberg: https://bloom.bg/4eBOTXF
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Complete property management solutions for astute Expats and Investors | Investment Manager (property) | Property Profiling | Performance Reviews | Sydney wide | Rent Roll Broker and Consultant
Incomes and expenses rise, savings fall Commonwealth Bank, which has the largest pool of bank account data in the country, has provided some fascinating insights into how earning, spending and savings habits have evolved in the face of higher interest rates and inflation. As the graph on the left shows, the average CBA household experienced income growth of 5.0% over the year to June 2024, due mainly to higher salaries, but also a big jump in income earned from rental properties and other investments. Meanwhile, as the graph on the right shows, spending excluding rent and mortgage costs rose just 3.1% year-on-year; unfortunately, though, growth in housing costs exceeded 10%. “Average savings remain higher than 2019 levels [i.e. before the pandemic]. However, there has been some evidence that a proportion of these excess savings have been utilised over the past year,” according to CBA. “Both average loan repayments and average rent payments have risen sharply in recent years. The large lift in interest rates since May 2022 has meant the lift in average mortgage payments has outpaced rent payments. Continued rental growth and fixed-rate rollovers will see this continue in 2024.” #property #realestate #homeloans #therentalspecialists
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Incomes and expenses rise, savings fall Commonwealth Bank, which has the largest pool of bank account data in the country, has provided some fascinating insights into how earning, spending and savings habits have evolved in the face of higher interest rates and inflation. As the graph on the left shows, the average CBA household experienced income growth of 5.0% over the year to June 2024, due mainly to higher salaries, but also a big jump in income earned from rental properties and other investments. Meanwhile, as the graph on the right shows, spending excluding rent and mortgage costs rose just 3.1% year-on-year; unfortunately, though, growth in housing costs exceeded 10%. “Average savings remain higher than 2019 levels [i.e. before the pandemic]. However, there has been some evidence that a proportion of these excess savings have been utilised over the past year,” according to CBA. “Both average loan repayments and average rent payments have risen sharply in recent years. The large lift in interest rates since May 2022 has meant the lift in average mortgage payments has outpaced rent payments. Continued rental growth and fixed-rate rollovers will see this continue in 2024.” #property #realestate #homeloans #therentalspecialists
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🏡 Investment savvy mortgage broker giving you the step-by-step strategy you need to build property wealth and achieve financial freedom 💰 Obsessed with mortgage structuring and tax minimisation
Incomes and expenses rise, savings fall Commonwealth Bank, which has the largest pool of bank account data in the country, has provided some fascinating insights into how earning, spending and savings habits have evolved in the face of higher interest rates and inflation. As the graph on the left shows, the average CBA household experienced income growth of 5.0% over the year to June 2024, due mainly to higher salaries, but also a big jump in income earned from rental properties and other investments. Meanwhile, as the graph on the right shows, spending excluding rent and mortgage costs rose just 3.1% year-on-year; unfortunately, though, growth in housing costs exceeded 10%. “Average savings remain higher than 2019 levels [i.e. before the pandemic]. However, there has been some evidence that a proportion of these excess savings have been utilised over the past year,” according to CBA. “Both average loan repayments and average rent payments have risen sharply in recent years. The large lift in interest rates since May 2022 has meant the lift in average mortgage payments has outpaced rent payments. Continued rental growth and fixed-rate rollovers will see this continue in 2024.” #property #realestate #homeloans
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Award-Winning Eastern Suburbs Property Specialist I Principal at Laing + Simmons Double Bay I Top Performer Laing & Simmons Network
Incomes and expenses rise, savings fall Commonwealth Bank, which has the largest pool of bank account data in the country, has provided some fascinating insights into how earning, spending and savings habits have evolved in the face of higher interest rates and inflation. As the graph on the left shows, the average CBA household experienced income growth of 5.0% over the year to June 2024, due mainly to higher salaries, but also a big jump in income earned from rental properties and other investments. Meanwhile, as the graph on the right shows, spending excluding rent and mortgage costs rose just 3.1% year-on-year; unfortunately, though, growth in housing costs exceeded 10%. “Average savings remain higher than 2019 levels [i.e. before the pandemic]. However, there has been some evidence that a proportion of these excess savings have been utilised over the past year,” according to CBA. “Both average loan repayments and average rent payments have risen sharply in recent years. The large lift in interest rates since May 2022 has meant the lift in average mortgage payments has outpaced rent payments. Continued rental growth and fixed-rate rollovers will see this continue in 2024.” #property #realestate #homeloans
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Incomes and expenses rise, savings fall Commonwealth Bank, which has the largest pool of bank account data in the country, has provided some fascinating insights into how earning, spending and savings habits have evolved in the face of higher interest rates and inflation. As the graph on the left shows, the average CBA household experienced income growth of 5.0% over the year to June 2024, due mainly to higher salaries, but also a big jump in income earned from rental properties and other investments. Meanwhile, as the graph on the right shows, spending excluding rent and mortgage costs rose just 3.1% year-on-year; unfortunately, though, growth in housing costs exceeded 10%. “Average savings remain higher than 2019 levels [i.e. before the pandemic]. However, there has been some evidence that a proportion of these excess savings have been utilised over the past year,” according to CBA. “Both average loan repayments and average rent payments have risen sharply in recent years. The large lift in interest rates since May 2022 has meant the lift in average mortgage payments has outpaced rent payments. Continued rental growth and fixed-rate rollovers will see this continue in 2024.” #property #realestate #homeloans
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Incomes and expenses rise, savings fall Commonwealth Bank, which has the largest pool of bank account data in the country, has provided some fascinating insights into how earning, spending and savings habits have evolved in the face of higher interest rates and inflation. As the graph on the left shows, the average CBA household experienced income growth of 5.0% over the year to June 2024, due mainly to higher salaries, but also a big jump in income earned from rental properties and other investments. Meanwhile, as the graph on the right shows, spending excluding rent and mortgage costs rose just 3.1% year-on-year; unfortunately, though, growth in housing costs exceeded 10%. “Average savings remain higher than 2019 levels [i.e. before the pandemic]. However, there has been some evidence that a proportion of these excess savings have been utilised over the past year,” according to CBA. “Both average loan repayments and average rent payments have risen sharply in recent years. The large lift in interest rates since May 2022 has meant the lift in average mortgage payments has outpaced rent payments. Continued rental growth and fixed-rate rollovers will see this continue in 2024.” #property #realestate #homeloans
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Self Employed Cii (MP+ER) Mortgage Broker and Equity Release Specialist (Non fee charging)
One of the most important points to come out of todays budget is the OBR's inflation forecast. They predict inflation will go below the Bank of England's 2% target in only a few months time. If so will we finally see the base rate reduce in order to stimulate growth in the economy. Lower mortgage rates will have a much greater impact on client disposable incomes than a 2% national insurance cut.
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Incomes and expenses rise, savings fall Commonwealth Bank, which has the largest pool of bank account data in the country, has provided some fascinating insights into how earning, spending and savings habits have evolved in the face of higher interest rates and inflation. As the graph on the left shows, the average CBA household experienced income growth of 5.0% over the year to June 2024, due mainly to higher salaries, but also a big jump in income earned from rental properties and other investments. Meanwhile, as the graph on the right shows, spending excluding rent and mortgage costs rose just 3.1% year-on-year; unfortunately, though, growth in housing costs exceeded 10%. “Average savings remain higher than 2019 levels [i.e. before the pandemic]. However, there has been some evidence that a proportion of these excess savings have been utilised over the past year,” according to CBA. “Both average loan repayments and average rent payments have risen sharply in recent years. The large lift in interest rates since May 2022 has meant the lift in average mortgage payments has outpaced rent payments. Continued rental growth and fixed-rate rollovers will see this continue in 2024.” #property #realestate #homeloans
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