freef4ll

Given they are spineless pussies who are too scared to oust their lunatic and chief you'd assume the Tories. I refuse to believe ideology will stand in their way, the trough dictates all as we have seen tonight.

It just won't matter, the sound of the trough being dragged away from the Labour mps will be enough to make them keep brown until the election.

Yeah its interesting now they're clearly delinking from the BoE. How does the BoE determine their rates then? I bet this is a huge question, so sorry if theres no simple answer.

The reality of what I said was you that I believe you are sending people the wrong message. "House prices are falling" can be countered with "House prices always go up long term" = Individual disregarding the advice not to buy "You are getting a mortgage you can barely afford which will quite easily increase by 50% in the coming months" = Individual listening to the advice not to buy. You are all 100% correct, now is the dumbest time to buy. My point is if you want to warn people send them concrete evidence that cannot be disputed. The message you sent out can be. "so why is it so wrong of me to help change sentiment and encourage the market to fall for the good of those buyers who see a property as a home and not an investment.". I have never said your motives to educte people are wrong. I am really not sure where you get this idea from.

All good. Thanks for the info. At a tiny level I understand that the cost of lending/borrowing + liability of interest to be paid on savings affect a banks offered interest rates but I dont understand the BoE rate at all. Up till this point in my living memory of about 30 years every time the BoE has changed rates this has been passed on to joe public by the banks. But how have they made these decisions and why have the banks followed it as a rule?

Not sure how to respond to that, no animosity or vitriol coming from my posts. I was hoping to learn something about interest rates and the views of you guys who have far greater knowledge than I, not cause drama.

I think that is quite a dangerous and innacurate thing to say. Over time house prices go up. The fluctuate in peaks and troughs in cycles but they always go up over time. The real risk in buying a house right now is NOT the price dropping, it is that people will not be able to afford the mortgage payments when interest rates climb, economy fails etc. If I received that mail from you I would ignore it. If you told me a £1000 mortgage today may cost me £1500 or more by this time next year then I'd take notice. Get the message right.

They are going up, yet no mention of it on a thread designed explicitly to tell people to stop buying. My point isnt that people should go buy a house it is that people should not be buying because of the risk of interest rate rise rather than prices being likely to fall in the short term. What influence to Darling have over the banks? Surely if they've already chosen to move away from the BoE set rates the writing is on the wall that they will do as they please?

Hi, first post here on a rather intrigueing thread. Been lurking a little over the last 6 months, brilliant forum with a shitload to say that others are too scared to. Before I go into my ramblings its worth mentioning I have little economic knowldege and want to learn, so by all means tear the following to shreds but please explain why so I can learn more Firstly, a 30% drop in the UK nothing. Peaks and troughs every step of the way. When you buy a house and the market crashes this means only one thing - dont move. Unless you are planning on taking out house secured debt right now (madness) a house price fall is meaningless. Yes you will pay 3 x what its worth in a mortgage but a mortgage is for 25-50 years not 5 (in the norm at least). A house value is completely arbitrary until you either buy, sell, or secure credit against it. Secondly, the real drama doesnt come from the drop it comes from the increasing cost of the mortgage as the interest rates rise. Thats when the defaults kick in and sales are forced, the sea of negative equity crippling the individual. If you are going to warn people about buying a house telling them it is going to devalue by 30% is really not that scary when they know it will "rebound" over time. Tell them about what happens when the interest rates rise and its brown pants time for them. Especially given that the mortgage lenders are seemingly extracting themselves from the tie in to the BoE set interest rates. If interest rates go up, that is when you will see the fraudulent mortgage practices you describe take their toll and we will see defaults and failings like never seen before. The counter to this is, in this environment banks will fail so while they are moving away from the BoE interest rate it is surely folly for them to take their rates to critical levels. I have to admit I am fairly unsure of the variables at work with interest rates, perhaps someone could explain. Thanks for taking the time to read, pile in and call me an idiot as you wish, I'm here to learn.