Friday, Aug 24, 2007
6% IR and we're doomed! say EAs
WhatInvestment: Interest rates start to bite
NAEA survey reveals interesting statistics about housing market. All is not rosy in EA land and they're desperately clinging to the hope that interest rates are not rising (at least temporarily.)
Posted by su @ 06:07 AM (793 views) Add Comment
8 Comments
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1. planning4acrash said...
What is amusing is that 6% thought that interest rate rises had a positive effect on the market, an altruistic estate agent? I doubt it, they were probably just having fun at a stupid question and having a laugh!!
But, this is consistent with claims a year ago that the housing market would crash at 6%. In reality, its a threshold, because 6% is unlikely to be the peak, still on for 6.25% by mid winter.
2. planning4acrash said...
And we have more debt now than a year ago, so the threshold may already have come to pass.
3. Orwell said...
P4C:
I thought so but now seems very unlikely surely (and anyway David Smith tells us it won't happen so it won't). What's your economic take?
4. su said...
Is it just me or is Stewart Lilly not making much sense? In para 3 he acknowledges that nearly half EAs feel that another rate rise would lead to a fall in housing prices, but in the last paragraph he states that house hunters should be comforted that IR are on hold.
5. planning4acrash said...
In my mind, i'd be more concerned with providers like Northern Rock putting its mortgage rates up by 1.25%. I doubt that BOE can resolve this in the short term without cutting rates, which, of course, would be daft in the long term. Remember that most of the interest rate rises are yet to feed through to fixed term mortgage rates and then there are those shocking figures of how much we owe! In my mind, events have taken over, 6% cannot be avoided and its a case of sitting tight. I reckon the bank lost control by cutting rates a couple of years ago by letting debt go up so much. The simple fact is that mortgage payments are as high as during the last crash, which means that many people will be loosing money and a crash. reposesions and bankruptcies are the only way out, does anybody know any other way of lancing a bubble? The fact that it now takes 5days more than a year to pay back a yrs debt means that we are gaining more debt just to pay off debt and this is not sustainable, particularly when borrowing costs will rise significantly over the next year. We have no buffer for a crisis and no way out.
6. C'mon Correction said...
P4C - I agree with 6.25% in winter. I'm guessing Feb 08. The only to prevent that, will be a major economic shock - which is quite likely at the moment!
7. Disillusioned said...
P4C: I don't understand what you mean by "it now takes 5days more than a year to pay back a yrs debt". Can you explain?
8. doomwatch said...
This just leads me to the conclusion that Keiron isn't a bright spark is he ?! Another copy and paste journo
who doesn't really know anything about the subject he is writing (clearly) and doesn't really
care what he rights as long as it hits the deadline. There are too many of these half whits wondering
into financial journalism.