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When Will Irs Start To Rise And Qe Stop? Any Predictions?

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The decision to buy or not all hinges on when IRs will rise and QE stops (background below) - any predictions? Will it hinge on the June election or will HMG be forced into raising them sooner?

--background---

I've followed the housing market since being priced out in 2004. Over the years I've come to one conclusion - IRs are always the key factor in starting a boom/bust, and sentiment then takes it to the "irrational exhuberance" point of no return. This was the reason I didn't buy when I could in 2006.

Anyway, I'm now wavering on buying a house. I can more than afford it, I have a secure job, have made my money back on the "price out" and quite frankly am sick of renting as I now have a young family.

However, I don't think the crash is over. IRs will rise and when they do, the market is going to be caught in a perfect storm. As a mate in the city said to me - "we don't know if we've passed through the hurricane, or are just sitting in the eye of the storm watching the hurricanes inner wall ripping through the calm air towards us - it's all a bit scary"

Sooo - I'm sitting on the fence with a large chunk of cash, watching QE/low IRs and worrying.

If we're in for another 2 years of psuedo-boom before a massive crash I'd sooner get off the fence and buy now.

If we're in for a japan style lost decade of slow, prolonged hpc falls I'd sooner get off the fence and buy now.

So far I've decided to wait until this autumn/winter and see what happens.

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If we're in for a japan style lost decade of slow, prolonged hpc falls I'd sooner get off the fence and buy now.

Errr why is that? Surely a secure rent would be better.

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It wont happen before an election. Gordon The Moron and his acolytes might as well just hang a big sign round all their necks saying 'lynch me' as do that.

Whether it happens after the election depends on the extent to which The Boy Wonder and Oz-bourne-mandius are in the pockets of the finance industry. Seeing as they spent their formative years towel whipping and playing 'hunt the soap' with each other, I'm not holding out much hope for after the election either.

Governments generally find that printy printy is a very difficult drug to go cold turkey from.

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It wont happen before an election. Gordon The Moron and his acolytes might as well just hang a big sign round all their necks saying 'lynch me' as do that.

Whether it happens after the election depends on the extent to which The Boy Wonder and Oz-bourne-mandius are in the pockets of the finance industry. Seeing as they spent their formative years towel whipping and playing 'hunt the soap' with each other, I'm not holding out much hope for after the election either.

Governments generally find that printy printy is a very difficult drug to go cold turkey from.

Never a truer word said - give that man afresh towel and some soap.

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The bank my wife works for (shes a senior manager in head office) think IR's will start to go up at the end of this year. Since they didn't predict the credit crunch I'm not sure how useful this prediction is but there you go.

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Considering that most countries interest rates came down together, imho they will rise together in the hope of not shocking the system.

As to when , nobody knows, it's all guesswork and not worth worrying about at the moment

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Errr why is that? Surely a secure rent would be better.

This is a personal circumstances thing.

When I started my renting career it was out of necessity (priced out), a few years ago when I could buy I carried on renting as I didn't have the cash to burn in a crash. Now I'm not in those situations, I've been lucky in recent years - losing my job and £400K wouldn't really impact my lifestyle much (as long as I got another job at about current median wage within 3 years!). I don't have an extravagent lifestyle and still own the same 2 cars I bought for £500 and £600 repectively in 2004, I do have a few classic and vintage run-abouts but they're not essential.

So for me it's about getting on with my life and allowing my family to do the same - something which despite what others say isn't easy to do in rented when you know you can buy. I'm also getting a little old for this game at 34! I'm not going to jump into the market if 20%+ is going to be wiped off values in the next 18m to 2 years. However, what is the good in keeping cash etc. (beyond what you need to be secure) for an extended period just to buy a slightly bigger place or whatever? Hence a 10yr slump and I'd sooner buy.

I've always said a house is a home not a cash machine/investment - I'd feel hipocritical if I change my mantra now!

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I had a meeting with my manager at HSBC yesterday. The suggestion was rising rates towards the end of this year/early next year.

This was her opinion on it anyway, not sure if it was based on any inside knowledge.

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The decision to buy or not all hinges on when IRs will rise and QE stops (background below) - any predictions? Will it hinge on the June election or will HMG be forced into raising them sooner?

--background---

[...]

When there are signs of sustained improvement in the economy and/or dangerous inflationary pressures

My guess is the latter, but I struggle see any chance of that this year.... :unsure:

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The decision to buy or not all hinges on when IRs will rise and QE stops (background below) - any predictions? Will it hinge on the June election or will HMG be forced into raising them sooner?

--background---

I've followed the housing market since being priced out in 2004. Over the years I've come to one conclusion - IRs are always the key factor in starting a boom/bust, and sentiment then takes it to the "irrational exhuberance" point of no return. This was the reason I didn't buy when I could in 2006.

Anyway, I'm now wavering on buying a house. I can more than afford it, I have a secure job, have made my money back on the "price out" and quite frankly am sick of renting as I now have a young family.

However, I don't think the crash is over. IRs will rise and when they do, the market is going to be caught in a perfect storm. As a mate in the city said to me - "we don't know if we've passed through the hurricane, or are just sitting in the eye of the storm watching the hurricanes inner wall ripping through the calm air towards us - it's all a bit scary"

Sooo - I'm sitting on the fence with a large chunk of cash, watching QE/low IRs and worrying.

If we're in for another 2 years of psuedo-boom before a massive crash I'd sooner get off the fence and buy now.

If we're in for a japan style lost decade of slow, prolonged hpc falls I'd sooner get off the fence and buy now.

So far I've decided to wait until this autumn/winter and see what happens.

I am in very much the same situation. I can echo a lot of what you have mentioned and I am wavering on buying too. My guess is that all the “action†is likely to be after the election. Not only might we expect higher IRs but also “some†inflation. Public finances in the UK are in such a state that anything is possible after the election really.

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