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delite1

What If Interest Rates Go Down

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If rates do go down and the market fails to pick up as many predict, will this then be panic time for the market as Sipps has been completely de-bunked there will be no saviour on the horizon?

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Guest absolutezero

There is a slight risk that the market would pick up slightly but I doubt there would be a load of buyers crawling out of the woodwork to buy because of a rate drop.

I think if rates drop, (a few people will buy because they don't understand what's going on and/or swallow VI spin) people will not buy and the majority will finally notice something not in their interests is going on.

The shit will ht the fan.

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If rates do go down and the market fails to pick up as many predict, will this then be panic time for the market as Sipps has been completely de-bunked there will be no saviour on the horizon?

No, as you are well aware, the market won't pick up substantially with a single cut, at least 3 cuts are needed to have an impact & more are welcome IMO.

The more the merrier, then it'll be time to rien the market in again.

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Right on cue...

"Pound May Gain as Economic Data Deter Further Rate-Cut Bets

Aug. 2 (Bloomberg) -- The pound may gain for a second day against the dollar after recent economic data cast doubt on expectations that the Bank of England will cut its benchmark interest rate more than once this year. "

http://www.bloomberg.com/apps/news?pid=100...wuZ8qc&refer=uk

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Guest absolutezero
No, as you are well aware, the market won't pick up substantially with a single cut, at least 3 cuts are needed to have an impact & more are welcome IMO.

The more the merrier, then it'll be time to rien the market in again.

Are you a bigger fool than you appear to be?

Prices too high = fewer buyers

Prices even higher = no buyers

Lower interest rates do not make it more affordable.

1% interest on something costing £1,000,000 = £10,000p.a. in interest alone.

If HPI is left uncorrected then prices of more than £1,000,000 for a grotty terrace will be common.

Wages have not matched HPI, therefore houses are unaffordable.

So what happens next? It doesn't involve 95% of the British renting either.....

Edited by absolutezero

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The price you pay is irrelevent.

Its how much you have to shell out each month, and how much do you have left.

Applying investment strategy on something that a young couple with to own to bring up a family is pointless.

Apply that Strategy to a new car, and see where that gets you. I see plenty of new cars on the road, are the people mad, or just getting on with their lives?.

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The price you pay is irrelevent.

Its how much you have to shell out each month, and how much do you have left.

Applying investment strategy on something that a young couple with to own to bring up a family is pointless.

Apply that Strategy to a new car, and see where that gets you. I see plenty of new cars on the road, are the people mad, or just getting on with their lives?.

Have you not read recent articles about the levels of poverty that recent FTBs are living in? My young nephew self-certified (falsified) his salary to buy a starter home. He was in serious trouble a year ago. Levels of repayment are not affordable at the moment.

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The price you pay is irrelevent.

Tell that to the Japanese who bought in their housing bubble...

I see plenty of new cars on the road, are the people mad

Yes. There are few better ways to throw money away than buying a new car.

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Guest absolutezero
The price you pay is irrelevent.

Its how much you have to shell out each month, and how much do you have left.

Applying investment strategy on something that a young couple with to own to bring up a family is pointless.

Apply that Strategy to a new car, and see where that gets you. I see plenty of new cars on the road, are the people mad, or just getting on with their lives?.

I beg to differ.

I think people do calculations about how long it will take to pay off a mortgage before they take it on. I certainly would.

70+ years is pushing it a little to pay for a terrace.

And as for the cars, I see many people up to their necks in debt.

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70+ years is pushing it a little to pay for a terrace.

The only reason people take on such huge debts is that 'everyone' expects that wage inflation will destroy the value of the debts within a few years.

Of course when 'everyone' expects that, it's probably unlikely to happen.

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beg to differ.

I think people do calculations about how long it will take to pay off a mortgage before they take it on. I certainly would.

70+ years is pushing it a little to pay for a terrace.

And as for the cars, I see many people up to their necks in debt.

That is wishfull thinking, just look at those muppets turning up at CAB with 150k of personal debt with interest rates of 50% on the loan.

The lack of financial savvy of todays generation is simply staggering. Basic Maths is not their strong points, but sh*t they can pump in 80 characters per minute on their mobiles.

I do not for one minute think they do anything other than look at the monthy repayments.

I work with a young lad who took a five years discounted rate of 2% with a 5 year extended tie in on SVR. I asked him what he would do in five years if rates were 8%. "Oh stuff that he replied, I will just tell them that I want to stay on the 2% rate".

With Brains like that, BTL'ers, Speculators, Developers, and Nigerian Scammers have nothing to fear, their kids school fees will be covered for a long time ahead.

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Guest Charlie The Tramp
I asked him what he would do in five years if rates were 8%. "Oh stuff that he replied, I will just tell them that I want to stay on the 2% rate".

Classic. :lol:

Could be the next Chancellor, thank Gawd I won`t be here.

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Guest absolutezero
That is wishfull thinking, just look at those muppets turning up at CAB with 150k of personal debt with interest rates of 50% on the loan.

The lack of financial savvy of todays generation is simply staggering. Basic Maths is not their strong points, but sh*t they can pump in 80 characters per minute on their mobiles.

I do not for one minute think they do anything other than look at the monthy repayments.

I work with a young lad who took a five years discounted rate of 2% with a 5 year extended tie in on SVR. I asked him what he would do in five years if rates were 8%. "Oh stuff that he replied, I will just tell them that I want to stay on the 2% rate".

With Brains like that, BTL'ers, Speculators, Developers, and Nigerian Scammers have nothing to fear, their kids school fees will be covered for a long time ahead.

But all those muppets have done is looked at how affordable the monthly repayments were.....

Just like you said......

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Tell that to the Japanese who bought in their housing bubble...

Yes. There are few better ways to throw money away than buying a new car.

*Groan* - Tell me about it!

It could well be the fastest way to lose money in the entire world. What else can offer you 30% depreciation in under three seconds? (the time it takes to roll off the forecourt).

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The price you pay is irrelevent.

Its how much you have to shell out each month, and how much do you have left.

Applying investment strategy on something that a young couple with to own to bring up a family is pointless.

Apply that Strategy to a new car, and see where that gets you. I see plenty of new cars on the road, are the people mad, or just getting on with their lives?.

Yes, it's mad to buy a new car.

They depreciate enormously in the first year.

Just like a house will depreciate enormously over the next

market cycle.

Best to buy a second hand car.

And best to rent till prices drop further.

Won't stop a couple bringing up a family, will it ?

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Exactly.

There is affordable and there is Affordable.

Home ownership is something quite new in the UK.

There has never in history been a market where houses were prices at affordable rates for unskilled and lowly paid workers.

Today a skilled worker considers himself/herself highly skilled because he knows exactly where to put the cones pointing out a wet floor.

In the 80's a few blaggers like myself got onto the market by hook and by crook, we did have to lie about our earnings. A mortgage on a Bricklayers salary working three days a week at best would have raised less than half of what was needed.

And I was skilled, I saw milkmen, postmen, hairdressers, labourers all doing the same. And we did make money, provided you could keep up the repayments inflation did the rest of the hard work. However as we all know it came to an end, and it was not exactly unexpected.

I have to say I do not see a situation where people on 17K will ever buy a house, but then ask yourself. Can a country afford such extravagance, some sectors of society will always require housing provided by the state, its about time we woke up to it and started building the Council Houses that Labour have sold off.

That right, Labour have sold off more than the Tories did over 20yrs.

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Its not the short term interest rates that most sensible people worry about,

It's the future long term rates (which may rocket if unemployment surges etc..etc..) , and the simple fact that property is overvalued anyway.

No one wants to take on huge debts (mortgage) anymore.

the end is nigh.

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That is wishfull thinking, just look at those muppets turning up at CAB with 150k of personal debt with interest rates of 50% on the loan.

The lack of financial savvy of todays generation is simply staggering. Basic Maths is not their strong points, but sh*t they can pump in 80 characters per minute on their mobiles.

I do not for one minute think they do anything other than look at the monthy repayments.

I work with a young lad who took a five years discounted rate of 2% with a 5 year extended tie in on SVR. I asked him what he would do in five years if rates were 8%. "Oh stuff that he replied, I will just tell them that I want to stay on the 2% rate".

With Brains like that, BTL'ers, Speculators, Developers, and Nigerian Scammers have nothing to fear, their kids school fees will be covered for a long time ahead.

Couldnt agree more LJ.

Dames

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Guest absolutezero
I have to say I do not see a situation where people on 17K will ever buy a house, but then ask yourself. Can a country afford such extravagance, some sectors of society will always require housing provided by the state, its about time we woke up to it and started building the Council Houses that Labour have sold off.

That right, Labour have sold off more than the Tories did over 20yrs.

Do you live or have you ever been up North?

Round here (before things went out of control) a terrace would cost £20,000 to £25,000.

The sort of people who lived in those earned about £12,000 a year.

A return to this situation is not unreasonable to expect.

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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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