Pushing a piece of string...

There's a great article in The Telegraph entitled "Borrowers taking out popular mortgages paying highest rates in seven years", which does pretty much what it says on the tin.

My favourite nuggets are these:

Lloyds TSB yesterday released its new products and borrowers must now pay up to 2.09 per cent more than the Bank of England base rate for a mortgage. Before last week's [1.5%] cut in the base rate, Lloyds was charging home owners 1.09 per cent above the official rate.

Abbey and Alliance & Leicester have also increased profit margins and now charge up to 2.04 per cent above the base rate. Mortgage experts say that until a month ago, the best deals allowed borrowers to pay just 0.5 percentage points more than the base rate, the average is now 2.34 percentage points above base rate.

To cut a long story, very few people will benefit from the base rate cut, and if they do, not by much. Whereas savers will no doubt be clobbered. Household spending power will henceforth be even lower.

H/t SoldOut at HPC.

"Santander agrees A&L takeover"

Woo hoo!

When I first covered this, A&L's market cap was £2 bn, so Santander seem to have timed this right (they've offered £1.2 bn).

So, Alliance & Leicester aren't going to spoil my winning streak - unless this goes sour like the mooted Texas Pacific Group/Bradford & Bingley deal, of couse.

Update, as JonB points out "... if your combined savings in Abbey and A&L exceed £35k, you need to move some elsewhere as soon as possible."

"Bradford & Bingley launches £300m cash call"

As I said a fortnight ago, next in line for rights issues are "Barclays, Alliance & Leicester and Bradford & Bingley".

B&B's market cap is currently £900 million, so that's a three-for-one rights issue, heady stuff indeed! OTOH, their 'total assets' were £52,000 million as at 31 December 2007, so £300 million only represents a modest 0.6%* write-down on assets. Will that be enough?

C'mon, Alliance & Leicester**, don't spoil my winning streak!

* Not 6% as I had first thought, whoops!

** Who have just written down their total assets of £79 billion by £192 million, a very modest quarter of one per cent.