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Borrowers do not understand long-term risk says Miles

Mortgage borrowers attach much more weight to the initial monthly repayments they will have to make rather than the overall cost of their loan over its entire term, Professor David Miles has concluded in his interim report published by the Treasury today.

The Miles Review of the UK Mortgage Market says that borrowers have a poor understanding of risk and pay scant attention to the security and insurance long-term fix rate mortgages could offer them, providing protection against unexpected interest rate rises.

Miles says: “In recent decades there has been been little long term fixed-rate mortgage lending in the UK. This report analyses why that is so. For many households, particularly those borrowing a great deal and those whose incomes are uncertain, there are significant advantages of fixing the level of repayments for several years. Yet few of such borrowers take out longer-term fixed-rate mortgages.”


Platinum Capital Management – Platinum Dynasty Fund

Type: Hedge fund Aim: Growth by investing long and short in large-cap Chinese equities and China-related companies Minimum investment: $100,000, euros 100,000, $25,000 or euros 25,000 through Platinum wealth management bond Investment split: 100% large cap Chinese equities and China-related companies Place of registration: Isle of Man Charges: Initial 1.5%, performance fee 15% Commission: Subject […]

October house prices up 1.8 per cent – ODPM

The Office of the Deputy Prime Minister&#39s house price index for October shows that the average house price in the UK was £161,365 up from £158,576 in September, a 1.8 per cent rise. The figures are significantly greater than Nationwide&#39s October index which said the average house cost £131,947, an increase of 2.0 per cent. […]

Platinum dazzles in China

Platinum Capital Management has created a hedge fund that will take a long and short investment approach to Chinese companies and companies based elsewhere that will profit from growth in China. The Platinum dynasty fund has a target return of between 15 per cent and 20 per cent a year. It was introduced because Platinum […]

Lords reject Revenue ruling on non-execs

The House of Lords has overturned an Inland Revenue ruling that would have made it impossible for retired directors to take their company pension as long as they remain a non-executive director. The Revenue had tried to recover £230,000 from a non-executive director of a carpentry firm after he resigned his full-time post and took […]


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