Saturday, November 20, 2010

Lord Young of Graffham

Lord Young of Graffham really made a political gaff this week by saying people were better off during this recession. Of course David Cameron was aghast, it was not a politically correct statement to make, particularly in the current climate of massive Government cuts.
But was the noble Lord correct in what he said?
Well I think he was ...... in part. If you had a tracker mortgage for instance, you will definitely have had a significant increase in your disposable income with the drop in interest rates. A colleague of mine was able to buy a second home (apartment) in a modern dockside development and rent out his original home purely because of the drop in interest rates . From my own personal point of view, I have a fixed rate mortgage on my modest abode and for the past two years have had no benefit whatsoever from the drop in interest rates. Had I, then I would have around £400 - £500 a month extra in my pocket. Would this make me better off than I was before the recession? Would it have cushioned me against the recession? You bet it would, on both counts.
It was probably a bit unfortunate that the noble Lord tarred everybody with his statement, but he was not wrong in stating that some of us (not me unfortunately) are much better off and have benefited from the recession provided you have a repayment mortgage and have stayed in employment throughout the period.
Some people do not like the truth and the noble Lord has unfortunately been a victim of this.

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