Thursday, Jul 12, 2007
RICS warning everyone everywhere
Firstrung: First time buyers, don't assume interest rates are at the top of the cycle - RICS
First time buyers should not assume that rates are at the top of the cycle. Any evidence that inflation pressures are persisting in the economy would see rates move higher for longer than currently expected. Those 2 million or so who are soon to come off fixed rate deals know only too well the hardship that is faced and the benefits that a longer term fix could have offered.
Posted by converted lurker @ 10:23 AM (152 views) Add Comment
5 Comments
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1. Orwell said...
Does anyone remember which, who was so unhappy, when I suggest that interest rates would be increasing considerably from here on?
2. paul said...
Foisted by their own petard.
This was going to happen sooner or later where they couldn't continue shouting up the market and drying foul whwnever interest rates were raised. Now they've taken the latter approach probably out of desperation to get the MPC to stop raising the cost of borrowing. But there's a nasty shock in store - wait and see what happens when the pound starts falling ...
3. Bobthe~ said...
You also have to weigh the benefit of a long term fix with the problem of a penalty charge if you have to walk away in those 10 years and 'hand back the keys'. On a 10 yr fix we were looking at a while back, that charge was 6% of the balance throughout the 10 year period, which for a high ltv could be almost equivalent to a drop of 6% on the sale price if you are a forced seller on an interest only mortgage and aren't going to buy anywhere else.
4. sold 2 rent 1 said...
Here's a story that you can take with as much salt as you want.
I went over to St Anne’s Hilton in Wokingham last night to have a few beers courtesy of my mate's company gold card.
At 1 AM I booked a cab and a very nice 60K BMW picked me up.
Got chatting to the driver about HPs, IRs etc. I even threw in a bit of Kondratieff for good measure.
He told me of a pick up from Warwickshire to central London one night for a client who was very close to the B of E.
On asking at what level would IRs peak the answer came back as 7.75%
Sounds like they are really worried about inflation now
5. Orwell said...
I did think that they would peak at about 7.5% think I've told most people here that from the very start.