David Holmes, a member of PWAG, reflects on the latest rise in interest rates announced on 6 July 2007.

 

Sir John Gieve announcing the rate increase

The fifth interest rise in a  year has just been announced taking the bank base rate up to 5.75% and further rises have not been ruled out as inflation is still not under control. Effects of the latest rises have still not worked their way through the system which will in turn have an effect on the prices manufacturers, suppliers of services and consumers have to pay.

One of the objectives of increasing rates is to try to slow down the rate of house price increases by effectively reducing the amounts that people can afford to borrow and thus reducing the amount they can afford to pay for a house. You have to have sympathy for people trying to get on the housing ladder with more and more people struggling to buy their first home without some of the help that was available in times gone by. You also have to consider the people who have just managed to buy their first home, these and the people who have perhaps taken the first step up the ladder are the ones who are most likely to become the first casualties of the rate increases. As the downward pressure on house prices is felt it is highly likely that some people with their increased interest costs could well find themselves in a negative equity situation and become well and truly trapped. This then has a knock on effect in the local economy as people have less disposable income and have to cut back be it on capital spends or the social / everyday activities and expenditure that we all incur.   

Imagine then on top of this plight if the development of the proposed Westfield Lane Wind farm goes ahead. Most of us who own homes, whether we have a large , small or no mortgage will be affected and would see a further reduction in the value of our homes on top of a potentially falling market. Think of the effect this would have if your home only dropped by the 15% quoted by  Bank’s in some of their promotional literature, the initial reduction would possibly be much greater and would take some time to recover but recover to what in a weakening market ? Think then about the knock on effect to the local economy of Pontefract and it’s districts.  How many jobs could be lost ? Erecting six 125m wind turbines off Westfield Lane would not create any sustainable jobs to offset this. Little wonder then that many local business people are supporting our campaign. 

Some people have accused us of scare mongering with regard to property valuations. We believe this article treads a very middle course compared to what you will now be hearing in the media after the latest interest rises and the effect on people and their property. So what is scare mongering really? Well, scare mongering for me is when people try to convince you that the polar ice caps will melt if we don’t have six 125m wind turbines over our heads.  We are not and never have been anti wind farms that make a positive contribution to our environment. To do this properly they need to be in the correct locations to maximise their potential output not in areas where wind speeds are marginal. They should also be sited where they make a positive contribution to peoples everyday lives and not located where the negatives outweigh the positives as is the case when they are located too close to inhabited areas on “soft sites” where the only benefit is reaped by greedy landowners and developers who care nothing for “our” and the environment at large and indeed will profit from your misery.