Time for banks to serve their customers

Banks are holding on to their money once again. Interest rates were raised by the Bank of England last month and the banks increased their variable interest mortgage rates within minutes but we tens of millions of savers are still waiting for some improvement in our interest rates. Meanwhile credit card interest rates are at their highest since 1998 and overdraft rates are almost uniformly at 40%.

At the same time hundreds of thousands of leasehold flat owners are stranded unable to sell or re-mortgage because banks are too frightened to loan on properties that have cladding. The government has announced that it will make the builders and ground landlords pay for any repairs, but still the banks are silent as to whether they will now lend on these properties now that there is little or no risk.

With peer-to-peer lending in decline a wonderful solution to both problems could be for the High Street banks to offer saver to borrower loans that would allow us to collectively fund mortgages for flat owners. It would give savers better rates than the standard 0.1% for instant access and 0.5% for notice accounts and free flat owners to move on.

It could be very popular. Or the banks could stop blacklisting flats without certificates guaranteetring the quality of the external wall coverings of the properties when they know that there are not enough qualified engineers in the country to make the inspections.

Giving customers what they want could be a novelty for banks. I will not hold my breath though.