Next leg of the housing boom to lift prices way above 2008 peak
Here we go again
So what will it take to get the MPC to raise rates? And will we be reading the next excuses to keep coshing savers next year? The only bright side I can see is that with the election over, the next government might be less afraid of cutting back on the subsidies to property owners.
Five-year fixed-rate deals, already down to 2.59%, expected to smash through the all-time low of 2.4
Mortgage brokers are now predicting that rates of less than 2% will become the norm in the months ahead as lenders engage in a price war that looks set to intensify in the run-up to Christmas. Over the past month, the yield on the five year gilt has fallen by 0.57% to 1.23%, while ten-year yields are down to 1.95%.
Flex rates now just 1.44%. More to come, as deflation sets in. House prices will rise in response.
From Wednesday October 8, Nationwide is reducing selected rates for existing Nationwide mortgage customers looking for a new deal. As part of the Nationwide Loyalty Rate Mortgages initiative, which compares the Societyâs mortgage rates for existing customers to those of its top six high street competitors, selected switcher rates will be reduced by up to 0.45%. The Loyalty Rate Mortgages changes are as follows: Two year fixed rates at 70 % LTV reduced to 1.89%, 75 % LTV reduced to 1.89% and 80 % LTV reduced to 2.29%. Five year fixed rates at 70 % LTV reduced to 2.94%, 75 % LTV reduced to 3.04% and 80 % LTV reduced to 3.44%. Two year tracker rates at 60 % LTV reduced to 1.44%, 70 % LTV reduced to 1.44%, 75 % LTV reduced to 1.44% and 80 % LTV reduced to 1.94%.
Nationwide slash early repayment fees
Join me, into the abyss.
Seriously need more Middle Class folk to move into Edmonton to keep me company. This is like Homerton in Hackney 10yrs ago. There are still 3 bed houses with gardens for between Â£250k and Â£300k. I will drip feed the eye watering levels of investment coming into the area of the next few weeks so that people will know that this 39% projection is most likely Conservative, particularly given that inflation and thus mortgage rates continue to collapse, with skyscraper after skyscraper being erected at the local London terminal, Liverpool Street Station.
Even more good news!
Buy-to-let lending fell 13% over the month to Â£2.1 billion in August, but increased 11% compared to August last year. First-time buyer lending declined in August compared to July, with 28,900 first-time buyer loans - 4% fewer than in July but 9% up on August 2013. By value, there was Â£4.4 billion of lending to first-time buyers - 4% down on July but 22% higher than August last year. Lending to home movers also declined, with the number of loans advanced to movers totalling 36,500, a 3% fall on the previous month but up 7% on August last year. By value, lending to movers totalled Â£7 billion, 3% down on July but up 17% on August last year.
House prices have dropped in London for the first time in more than three years and are set to fall further this year, according to estate agents in the capital. RICs said on Thursday the âsteam was evaporatingâ from the market(!). Martin Ellis, the Halifaxâs housing economist, said the data suggested that annual inflation âmay have peaked around 10 per centâ and would now "moderate".
Zero borrowing costs has encouraged speculation not the economy
IMF - more than half a decade of borrowing costs close to zero had encouraged speculation rather than the hoped-for pick up in investment. Accommodative policies aimed at supporting the recovery and promoting economic risk taking have facilitated greater financial risk taking,(instead). The best way to safeguard financial stability and improve the balance between economic and financial risk taking is to put in place policies that enhance the transmission of monetary policy to the real economy â thus promoting economic risk taking. These include tougher supervision of banks, requirements on them to hold more capital, and curbs on lending to specific sectors such as housing. - sounds reasonable, anyone listening?
The good news keeps on rollin
London house prices fell last month for the first time in more than three years, and prices nationwide showed their smallest increase in 15 months, a major house price survey showed on Thursday. The Royal Institution of Chartered Surveyors said prices in London fell for the first time since January 2011, ending the longest unbroken run of increases in more than 20 years. The signs of a cooling in Britain's housing market are likely to be welcomed by the Bank of England, which earlier this year warned that Britain's economic recovery would be at risk if house prices continued to rise far faster than wages. The RICS national balance slid to +30 for September from a downwardly revised +39 in August. Fading price momentum is more than just a London story," RICS said.