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Guest wrongmove

Of Course Rates Will Come Down This Week

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Guest Charlie The Tramp

Hamish who set the rates in 1667?

The earliest historical BoE rates only go back to 1694 @6%

Ah was that the time when the peasants shouted free money and started off the BTL market buying up all the mud huts off plan. :D

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ok so what

the mpc will reduce by 0.25% as a token that will make no difference, either to the housing market or the economy.

the housing market will retrench in the face of the bursting of the bubble.

this will not only start a general recession, which is already entrain in construction, but lead to lost confidence that will bring about further recessionary tendencies.

the 2 things that will reverse the econmic downturn will be currency devaluation, making exports more competitive and possibly increased government expenditure

.the latter cant go on for long as the curent account deficit is already bad.

Edited by the don

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I cracked open a bottle of Champagne this evening, yes the expensive version, in anticipation of this thursday.

What I imagine will happen now, is a series of rate cuts, followed by a revival in HPI, followed by a series of rate rises & the subsequent slowdown.

This will pan out over several years & people will tell me in 2008/2009 that I was lucky to own property back then when it was cheap!

And I'll say LUCKY MY AR*E!!!!!

Like a never ending story.

:D

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Guest Time 2 raise Interest Rates
I cracked open a bottle of Champagne this evening, yes the expensive version, in anticipation of this thursday.

What I imagine will happen now, is a series of rate cuts, followed by a revival in HPI, followed by a series of rate rises & the subsequent slowdown.

This will pan out over several years & people will tell me in 2008/2009 that I was lucky to own property back then when it was cheap!

And I'll say LUCKY MY AR*E!!!!!

Like a never ending story.

:D

You cracked open a bottle? Reading the above post it sounds like you've been on a bender since Friday night. :D

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Guest Charlie The Tramp
What I imagine will happen now, is a series of rate cuts, followed by a revival in HPI, followed by a series of rate rises & the subsequent slowdown.

If we are talking 2015 I most definitely will go along with that. :)

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TTRTR - you are unbelieveable. Surely you are winding us up? Further HPI - where exactly is the money supposed to come from? Stuff your champagne - I've just been on a £200 bender thanks to my sell to rent fund. I reckon I can spend a bit of it since I'm unlikely to need all ot if for my next house purchase after the crash. Ah, happy days, to have sold at the right time!

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Guest Time 2 raise Interest Rates
I cracked open a bottle of Champagne this evening, yes the expensive version, in anticipation of this thursday.

What I imagine will happen now, is a series of rate cuts, followed by a revival in HPI, followed by a series of rate rises & the subsequent slowdown.

This will pan out over several years & people will tell me in 2008/2009 that I was lucky to own property back then when it was cheap!

And I'll say LUCKY MY AR*E!!!!!

Like a never ending story.

:D

Joking aside, I realise you're heavily invested in buy to let but surely you're not serious. Do yourself a favour, get out while you can or at least hedge your bets and just keep a couple. You'll be thanking me in 2008. :P

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TTRTR  - you are unbelieveable. Surely you are winding us up? Further HPI - where exactly is the money supposed to come from? Stuff your champagne - I've just been on a £200 bender thanks to my sell to rent fund. I reckon I can spend a bit of it since I'm unlikely to need all ot if for my next house purchase after the crash. Ah, happy days, to have sold at the right time!

Another STR leaking money?

My HP's are no more than 3 times my tenants salaries & you ask me where the money's coming from?

:lol::lol::lol:

Edited by Time to raise the rents.

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I'm leaking less money now that I'm renting. I couldn't afford my mortgage so had to sell. I have a nicer flat for less money now and quite a stash in the bank.

What do you reckon the average salary is in the UK, and London?

I'd say 18000 for the UK as a whole and 25000 for London.

Edited by Matt

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I'm leaking less money now that I'm renting. I couldn't afford my mortgage so had to sell. I have a nicer flat for less money now and quite a stash in the bank.

What do you reckon the average salary is in the UK, and London?

I'd say 18000 for the UK as a whole and 25000 for London.

No personal attack there. Just remember, interest minus tax = sustaining the inflation adjusted value of your STR cash, so don't spend any of it! Spend your wage instead.

Your tenants are 4 or 5 to a house !

And?

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Another STR leaking money?

My HP's are no more than 3 times my tenants salaries & you ask me where the money's coming from?

:lol:  :lol:  :lol:

Ohhh poor you, have prices fallen that much already? :lol:

More seriously, I have one question for you, if IR goes down, knowing that IR are still on the way up in the US, where do you see the pound in, say 6 months?

Then what is your view on inflation?

Lastly, I am quit puzzled by the lack of consensus in the BoE, are some completely wrong. Are they fighting for their own interest?

Now I live one hour from London, I have to say that all the salaries are a fraction of what I have seen in London (whith youg bankers income as stupid as house prices I think) and when I see the price of some miserable houses... I am more and persuaded that something is wrong and a correction will need. You do not need any economy knowledge for that just common sense.

In France, same thing, people struggle more and more, and this is simply going to be a big big fall.

Have a nice week! Well while you can, coz I think you'll be very down in a few months and you may then binge on cheep whisky ;) . As far as I am concerned, I do not drink at all so I am safe!

TWT

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(Time to raise the rents. @ Jul 31 2005, 09:42 PM)

I cracked open a bottle of Champagne this evening, yes the expensive version, in anticipation of this thursday

Expensive version? So that will be the £9.99 Sainsbury's "own brand" then?

Never met a "person" like you with any taste, yet alone class yet. You write with as much class as Asti Spumante in a coffee mug! :P

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I cracked open a bottle of Champagne this evening, yes the expensive version, in anticipation of this thursday.

What I imagine will happen now, is a series of rate cuts, followed by a revival in HPI, followed by a series of rate rises & the subsequent slowdown.

This will pan out over several years & people will tell me in 2008/2009 that I was lucky to own property back then when it was cheap!

:D

Wrong, surely?

Assume a 200K house, with a 200K mortgage for the sake of an example (doesn't matter about the absolute value, it is the percentage we are interested in here).

By my calculations, a quarter point reduction in rates equates to approximately 9K less in repayments over the entire life of a 25 year morgage. So assuming the limiting case, where a property is bought using only borrowed money, for 25 years, and everything else remains the same, etc. etc. that then equates to approx a 4.5% reduction in the cost of the property. So we can expect the effect to be a once-only 4.5% increase in the price (as an upper limit). That could appear over a year at roughly 0.375% a month and then stop altogether, over ten years at 0.0375% a month or whatever. But nothing like the previous 2% a month or whatever we saw in the last few years.

All the above is back of the envelope stuff, and I welcome any corrections you can see to the calculation and any logical explanation of why a quarter point rise would be worth dancing in the streets about.

Edited by Levy process

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Guest Riser

Drive through the mist from the BLOG

It is too early, though, to say it has put its foot back on the accelerator to rev things up a bit. Indeed, some members of the Bank's monetary policy committee (MPC) would say they never actually put the brakes on when they raised rates between November 2003 and August last year from a 48-year low of 3.5% to the current 4.75%. They argue that all they did was take their foot off the accelerator and never even had to apply the brakes because the economy slowed down faster then expected.

Putting their foot back on the accelerator will make no difference because the economy has run out of juice. B)

Edited by Riser

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Let's see the maths please.

How exactly would a quarter point drop in interest rates produce ANYTHING LIKE the rises we've seen over the last few years in property values?

As far as I can see, the effect will be trivial. As would three quarter point cuts. And I'm talking about maths here. Not answers including stuff like "sentiment" etc.

Calculators out; show all your working. :angry:

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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