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Uk Mortgage Rates Could Top 8%: Economist

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http://www.cnbc.com/id/43146937

Home owners could be in for a nasty surprise as borrowing costs return to normal over the medium term, according to Capital Economics.

“There is plainly a great deal of uncertainty around what will happen to spreads on mortgage interest rates when Bank Rate does eventually rise. But if current spreads were maintained, average mortgage interest rates could rise to 8 percent,” Paul Diggle, a property economist at Capital Economics, wrote in a research note.

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FFS if headlines line this keep appearing I'm going to end up cracking one off while reading HPC :blink:

lol

It's only how many years of reading this damn site? You deserve one.

Actually, we all deserve one. A staged, mass 'effort'; all of us in ranks. The highlight of a major banking/mortgage/property conference.

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I'd love to see 8% but unless something drastic happens I'd say medium term is about 5/10 years away.

Edited by Pent Up

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No way, not in the next five years, maybe not in the next ten, the whole 'economy' would crash...

that tends to be what happens in a depression, if this is actually a depression. At the end of the day countries dont get a choice what their interest rate is if the market decides at some point they arent solvent and in such case the base rate will be a damn site higher than 8%, at least double, whilst however the country is perceived solvent the country does get to set rates and can keep them as low as they want

Edited by georgia o'keeffe

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Although each homeowner is individually a small fish, collectively they are too big to fail and they know it. The government will protect them.

And the savers? I believe that there are more savers than borrowers.

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And the savers? I believe that there are more savers than borrowers.

+1

My parents both pensioners and savers and life long Tories are set to vote UKIP if Cameron doesn't do something about their savings income before the next election - they firmly blame government not banks

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And the savers? I believe that there are more savers than borrowers.

There are indeed, many more. What staggers me is the forecasts of Armageddon if interest rates go up to the heady heights of 2%; it really shows just how screwed we are.

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And the savers? I believe that there are more savers than borrowers.

And those with cash in the bank have more spending power. If I was recieving 8% on my savings I'd be treating myself to some nice luxuries quite often. Whereas now I don't spend anything that is not essential.

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And the savers? I believe that there are more savers than borrowers.

But is the average saving as large as the average borrowing ? I'd suspect not.

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But is the average saving as large as the average borrowing ? I'd suspect not.

I did consider that, but are the lifetime savings, say £25K, of someone on a low income less precious to them than a few million saved by a high earner? I suspect not and both only get one vote.

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I did consider that, but are the lifetime savings, say £25K, of someone on a low income less precious to them than a few million saved by a high earner? I suspect not and both only get one vote.

Which one gets the bleeding heart liberals, crying "won't somebody think of the children" though ?

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Any government that dramatically increases rates will loose their next election and they know it..

that tends to be what happens in a depression, if this is actually a depression. At the end of the day countries dont get a choice what their interest rate is if the market decides at some point they arent solvent and in such case the base rate will be a damn site higher than 8%, at least double, whilst however the country is perceived solvent the country does get to set rates and can keep them as low as they want

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And those with cash in the bank have more spending power. If I was recieving 8% on my savings I'd be treating myself to some nice luxuries quite often. Whereas now I don't spend anything that is not essential.

+1 planning ahead...forewarned is forearmed. ;)

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Actually the real problem is the source of the suggestion. Does anybody have any examples of Capital Economics getting anything right? I remember meeting someone who said that he has done well in recent years by simply doing the opposite of what they had suggested!

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Any government that dramatically increases rates will loose their next election and they know it..

The tory party lost the next election the moment Cameron became Prime Minister, just as Labour would have had they been voted in. A party in charge will almost certainly lose an elction when the voters have systematically become poorer whilst they have been in Power. Since this adjustment downwards in living standards is structural (and happening all over the west which is why all parties in power of any colour are similarly getting booted out) interest rates shouldnt really be a focus, it is after all in the BOEs hands. The tory party should have one single point of focus politically and it should be the same as Labour have had since the Nasdaq popped and that should be to do everything they can to make sure UKs judgement day can be extended beyond their time in office however ultimately more destructive it is,

Most of the popn will only ever blame the party in power when pretend and extend stops and reality has to be faced with all the negative economic implications that entails

Edited by georgia o'keeffe

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No way, not in the next five years, maybe not in the next ten, the whole 'economy' would crash...

It's quite possible for mortgage rates to be very high even if interest rates aren't. BoE +4.5% is not uncommon, so Interest rates only have to get over 3.5% which is in line with historical norms. OECD are saying UK interest rates must rise to 3.5% during 2011...

Interest rates will start to ease upwards in the next few months. It will be like getting stretched on a rack.

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Tenement block in central Edinburgh, my landlord bought for about 60k, last mug in (2007) paid 170k. People will buy as prices collapse (even at 8% mortgage rates) allowing the banks to trade through? Banks are lending, just not at silly multiples any more?

Edited by dances with sheeple

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+1

My parents both pensioners and savers and life long Tories are set to vote UKIP if Cameron doesn't do something about their savings income before the next election - they firmly blame government not banks

It's too late, their wealth is permanently destroyed.

With negative interest rates the purchasing power of their cash is already dropping every day and the effect is compounded because earning less now means that there is less to earn anything from in the future.

Cameron & Osborne won power by telling lies to people like your parents.

http://www.guardian.co.uk/politics/video/2009/jan/05/david-cameron-tax

http://www.telegraph.co.uk/comment/personal-view/3835309/Virtuous-savers-and-pensioners-have-suffered-most-under-Labour.html

If they had removed the 20% tax on savings as promised it would have helped people like that without raising rates for those in debt. Instead the prudent are having their money stolen.

Cameron & Osborne don't care they won't get their votes again they have both won several lottery jackpots getting into power, like Tony Bliar.

http://www.dailymail.co.uk/news/article-1245967/Blairs-lucrative-deal-hedge-fund-bet-bank-failures.html

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  • 312 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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