Northern Rock in the public sector

[BlasterBates]

Northern Rock now in the public sector

Along with Royal Mail, the NHS etc. Does this mean that the UK government now effectively owns 20% of the UK housing market.


Is this good or bad ?

[AtW]

More important would be if (and I can't see this being avoided) the money guaranteed by the Govt will be counted as part of public debt, this would increase debt ratio of GDP considerably.

So much for prudence of Mr Brown.

[Platypus]

More important would be if (and I can't see this being avoided) the money guaranteed by the Govt will be counted as part of public debt, this would increase debt ratio of GDP considerably.

So much for prudence of Mr Brown.

This is NOT happening. Brown has managed to avoid this. I can't remember how, but I read that he had.

[AtW]

This is NOT happening. Brown has managed to avoid this. I can't remember how, but I read that he had.

He has not avoided anything - there is no private sale yet and even if it happens then Govt had to put guarantee on £30 bln of bonds in effect making them gilts - this is likely to go on the books, though I am sure Brown is very experienced with accounting scams like PPI that shifts lots of public debt off the books. Enron style accounting that is

[milanbenes]

this could be really good for the Northern Rock,

might it make the Northern Rock the safest place to keep your money as it is backed by the tax payer ?

Milan.

[Bluebird]

does this mean they won't do joint mortgages because this would be debt shifting ?

[AtW]

does this mean they won't do joint mortgages because this would be debt shifting ?

They won't be doing many morgages now - they will offer very high non-competitive rate so that their customers have to take morgage from somewhere else thus repaying amount to the firm, which in turn will repay it back to the taxpayer. The main issue here is that if house prices fall and people get negative equity then they simply won't be able to get another morgage and will have to stay with NR.

[Bluebird]

They won't be doing many morgages now - they will offer very high non-competitive rate so that their customers have to take morgage from somewhere else thus repaying amount to the firm, which in turn will repay it back to the taxpayer. The main issue here is that if house prices fall and people get negative equity then they simply won't be able to get another morgage and will have to stay with NR.

my mortgage "fixed rate" period is up in October this year, can't move til then as they want £7k fees....

[PAH]

I'm just waiting for the day all those Northern Crock mortgage holders get a knock on the door from the council saying the home is now their property, and they need it to move in a single mother or a family of immigrants.

[Andy2]

NR is offering one year bonds with rather good 6.7% interest rate
are they any good