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Richard

Just Saw A Piece On Sky News Where A Couple Were Asked About Irs

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They spoke to a couple in Redditch and asked them what a raise in IRs would mean for them.

They guy said "to be honest we could do with them going down, if they go up it will cripple us".

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There was something similar about a month ago on the beeb for an htb sucker. She was surprised and shocked that IR could possibly rise....... turns out she was a teacher :huh:

a few years ago we had millions hanging by a thread. Now there are even more. They know they are pouring petrol on the fire, What do they think is going happen when it runs out?

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There was something similar about a month ago on the beeb for an htb sucker. She was surprised and shocked that IR could possibly rise....... turns out she was a teacher :huh:

a few years ago we had millions hanging by a thread. Now there are even more. They know they are pouring petrol on the fire, What do they think is going happen when it runs out?

IMO it won't be what many think.

Bail-ins all round, like Cyprus on steroids - we'll be robbed of all our savings, people with property will lose a bit but savers will be left with very little. There won^t be much alternative. I'm going to take all my UK-based money out of the UK soon, trouble is I can't think of a country that won't get the same treatment except maybe Iceland.

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IMO it won't be what many think.

Bail-ins all round, like Cyprus on steroids - we'll be robbed of all our savings, people with property will lose a bit but savers will be left with very little. There won^t be much alternative. I'm going to take all my UK-based money out of the UK soon, trouble is I can't think of a country that won't get the same treatment except maybe Iceland.

Don't have substantial cash holdings then.

Or put them in a North Cyprus bank: they've already been done once.

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Don't have substantial cash holdings then.

Or put them in a North Cyprus bank: they've already been done once.

They'll go for everything, it's true that cash will be the easiest target but it's difficult to think what might be safest.

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They'll go for everything, it's true that cash will be the easiest target but it's difficult to think what might be safest.

How would they go for shareholdings in an international company for example? Give us one share for every ten you hold? Can't see it.

Cash is the soft target and few will complain if they set the bar high enough: everybody with over £500k in cash in a bank loses 10% abover that amount.

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Shove it in a pension pot. That is protected by city spivs.

My thoughts exactly. From now on, all saving will be done with tax/NI relief added at source. Instant 20-40% growth.

Hypothetically there are ways and means to get at it whenever you want anyway, thanks again to the city spivs and their wizzy financial instruments. :ph34r:

Edited by Frugal Git

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How would they go for shareholdings in an international company for example? Give us one share for every ten you hold? Can't see it.

Cash is the soft target and few will complain if they set the bar high enough: everybody with over £500k in cash in a bank loses 10% abover that amount.

The bar won't be that high, it can't be, the debt is so large.

I haven't crunched any numbers but I'd guess the bar will be about 50k, with the elite being tipped off about a fortnight in advance.

One thing is for certain, they won't allow a "normal" crash.

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How would they go for shareholdings in an international company for example? Give us one share for every ten you hold? Can't see it.

Cash is the soft target and few will complain if they set the bar high enough: everybody with over £500k in cash in a bank loses 10% abover that amount.

Sure but in the circs of a financial meltdown I doubt if they'll need to take the shares away for you to lose the money.....

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The bar won't be that high, it can't be, the debt is so large.

I haven't crunched any numbers but I'd guess the bar will be about 50k, with the elite being tipped off about a fortnight in advance.

One thing is for certain, they won't allow a "normal" crash.

It'll be 85k surely. Breaching the 85K guarantee would take brass cojones that I don't think they have.

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They spoke to a couple in Redditch and asked them what a raise in IRs would mean for them.

They guy said "to be honest we could do with them going down, if they go up it will cripple us".

Reminds me of the Miles Report

My link

I've posted it before and it must have been discussed times many, but what made me laugh then (and continues to make me laugh now) is the fact that he feels that the finding that the median borrower only looks at the monthly payment at the outset when signing on the dotted line is somehow a finding.

This IMO is the problem of the so-called 'democratisation of debt' - people's willingness to take on debt will not necessarily bear any relationship to the their ability to service debt. If they are taking on debt against an asset price that always rises because interest rates always fall, then if they operate by a simple rule of thumb which is that what happened yesterday will happen again today, it follows that they will bid up the asset price beyond all reason and take on ludicrous debt. Which is what has happened.

The problem is the zero rate bound.

Rates reach a place where they can go no lower.

I still think that for the UK the game has not even started yet - i.e. there will in the fullness of time be a calamitous fallout as a consequence of the bubble inflated from 1997 (there or thereabouts) onwards, but we are not there yet.

In the superficial commentary of the mainstream media and the political propagandists the view is settling in that we are weathering the storm. I just don't buy it. I'm with Zugswang's sig - "It's not a recovery, it's a relapse". Crucially - there is a sickness. Extending too much debt against residential housing makes the banking sector fragile and constrains the ability of the banking sector to allocate credit to companies that might produce goods that we could exchange for things that we need to import, (and create jobs in the process).

We're on the wrong side of history - in danger of becoming (economically speaking) a client state of the net exporters who provide us with credit. Did Greece get rich borrowing from Germany to by German manufactures? Where is this going for us?

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a few years ago we had millions hanging by a thread. Now there are even more. They know they are pouring petrol on the fire, What do they think is going happen when it runs out?

What will happen is a minority of homeowners, those who were overleveraged, and who now can't afford the payments, will be repossessed. Either that, or interest rates simply won't rise for 20 years, as per Japan.

Personally, I think the mass repossession scenario is rather cruel and is a sad consequence of houses being seen as "investments" rather than homes. If it's an investment, then the usual disclaimers apply - the value can go up or down.

Given that the housing "market" is rigged, I'd rather it were rigged in the sense of a massive price crash, followed by 100 years of stability. That would do this country the world of good, long term... while yes, it would hurt lots of people in the short term.

But hopefully people aren't so selfish that they only care about themselves, and not their children and the next generation. Aren't they??? :o

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It'll be 85k surely. Breaching the 85K guarantee would take brass cojones that I don't think they have.

The word guarantee no longer appears on the FSCS website- nor does it appear in the letter I received from Nat West this morning reassuring me that my money was safe.

Take a look at this thread;

http://www.housepricecrash.co.uk/forum/index.php?showtopic=196213

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They'll go for everything, it's true that cash will be the easiest target but it's difficult to think what might be safest.

Cash in a safe is a harder target? BTL landlords will be burned before they touch deposit accounts, and lets face it many ordinary people do not have substantial savings? IR`s will rise and some big debt holders will be blown up, the sun will still rise.

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I still think that for the UK the game has not even started yet - i.e. there will in the fullness of time be a calamitous fallout as a consequence of the bubble inflated from 1997 (there or thereabouts) onwards, but we are not there yet.

In the superficial commentary of the mainstream media and the political propagandists the view is settling in that we are weathering the storm. I just don't buy it. I'm with Zugswang's sig - "It's not a recovery, it's a relapse". Crucially - there is a sickness. Extending too much debt against residential housing makes the banking sector fragile and constrains the ability of the banking sector to allocate credit to companies that might produce goods that we could exchange for things that we need to import, (and create jobs in the process).

I agree. How much higher in price *can* houses go, realistically speaking? They're already absurd in London, compared to the average London worker's salary.

Now, theoretically they could go much higher, like in certain Chinese cities where an apartment costs 20 times a person's salary - but then, it means less and less of the city's residents can afford to buy (especially the younger ones), which would surely result in stagnation in the long term, as people get fed up with renting and go off to greener pastures.

Yes, they can extend mortgage length to 30 or 40 years, but that simply highlights how much more expensive things have become, relative to previous generations who, although I'm sure they "had it toof", got to pay their mortgages much more quickly. Besides, this way doesn't really reduce monthly payments that much, which can easily be wiped out by interest rate rises.

Government may choose to create yet more absurd schemes to "Help" people get further into debt while propping up prices, but at some point the younger generation are (I hope) going to realize that all these schemes are doing is making houses even more unaffordable for them.

I think the tide *will* turn, perhaps is already doing so. The difficult question is how quickly it will happen. It could be a slow downward decline like Japan, or there could be a Black Swan or two that results in 5%, 10% or even 20% falls a year.

I'm not in the prediction business (otherwise I'd open a betting shop). I just don't know. What I *do* know is this thing has dragged out longer than most people here expected. We're seeing just how many people, groups and institutions have a vested interest in keeping prices high and constantly going up, so it's going to need something pretty drastic to bring them substantially down.

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I agree. How much higher in price *can* houses go, realistically speaking? They're already absurd in London, compared to the average London worker's salary.

Now, theoretically they could go much higher, like in certain Chinese cities where an apartment costs 20 times a person's salary - but then, it means less and less of the city's residents can afford to buy (especially the younger ones), which would surely result in stagnation in the long term, as people get fed up with renting and go off to greener pastures.

Yes, they can extend mortgage length to 30 or 40 years, but that simply highlights how much more expensive things have become, relative to previous generations who, although I'm sure they "had it toof", got to pay their mortgages much more quickly. Besides, this way doesn't really reduce monthly payments that much, which can easily be wiped out by interest rate rises.

Government may choose to create yet more absurd schemes to "Help" people get further into debt while propping up prices, but at some point the younger generation are (I hope) going to realize that all these schemes are doing is making houses even more unaffordable for them.

I think the tide *will* turn, perhaps is already doing so. The difficult question is how quickly it will happen. It could be a slow downward decline like Japan, or there could be a Black Swan or two that results in 5%, 10% or even 20% falls a year.

I'm not in the prediction business (otherwise I'd open a betting shop). I just don't know. What I *do* know is this thing has dragged out longer than most people here expected. We're seeing just how many people, groups and institutions have a vested interest in keeping prices high and constantly going up, so it's going to need something pretty drastic to bring them substantially down.

Affordability stress testing with MMR compliance should keep sales volumes low. There are more wannabe sellers than buyers able to complete at present.

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They spoke to a couple in Redditch and asked them what a raise in IRs would mean for them.

They guy said "to be honest we could do with them going down, if they go up it will cripple us".

Im a saver...so interest rates at the current level has crippled us.

**** them.

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Affordability stress testing with MMR compliance should keep sales volumes low. There are more wannabe sellers than buyers able to complete at present.

And lack money.

Last year saw a bit of activity on my street - Jan-March saw about 3 houses exchange.

Doesn't sound a lot but nothing had sold for the last 6 years.

Then activity ground to a halt.

I thought it might be that banks are only allocating a small amount to any area and once thats gone, its gone.

Maybe a token 'we're selling mortgages' thing.

This year. Nothing.

I think last years activity occurred due to a small window between FLS money being released and before the affordability checks were enforced.

All the sold hosues were small - 2 up, 2 down type.

I know one has a couple (mortgagee) plus 2 adult lodgers - to help pay the mortgage Im told FFS.

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And lack money.

Last year saw a bit of activity on my street - Jan-March saw about 3 houses exchange.

Doesn't sound a lot but nothing had sold for the last 6 years.

Then activity ground to a halt.

I thought it might be that banks are only allocating a small amount to any area and once thats gone, its gone.

Maybe a token 'we're selling mortgages' thing.

This year. Nothing.

I think last years activity occurred due to a small window between FLS money being released and before the affordability checks were enforced.

All the sold hosues were small - 2 up, 2 down type.

I know one has a couple (mortgagee) plus 2 adult lodgers - to help pay the mortgage Im told FFS.

Looks to be the same round nothants. Stuff that "sold" last year is re-appearing again this year.

Property bee detecting lots of SSTC->NULL's

The last 5 years I have viewed houses but steadilly over the last 2 years the viewings have tailed off as peoples ability to accept reality has diminished. I've stopped now, I sometimes can't even bring myself to look at rightmove as the chances of finding anythign worth buying is ZERO.

As the try and push up prices, their business will dry.

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Looks to be the same round nothants. Stuff that "sold" last year is re-appearing again this year.

Property bee detecting lots of SSTC->NULL's

The last 5 years I have viewed houses but steadilly over the last 2 years the viewings have tailed off as peoples ability to accept reality has diminished. I've stopped now, I sometimes can't even bring myself to look at rightmove as the chances of finding anythign worth buying is ZERO.

As the try and push up prices, their business will dry.

True.

This is in the SW.

Back in my home region of North Yorks coast nothing is really selling.

You get a couple of sales a month but then there are about 20 odd houses piling up each week.

It looks almost like a mass evacuation. In reality its lots of probates (when OAPS are no longer retiring to the seaside) and people trying to exit their ill-advised holiday home investment. OOO are totally screwed. Buyer's market does not do the situation justice.

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They spoke to a couple in Redditch and asked them what a raise in IRs would mean for them.

They guy said "to be honest we could do with them going down, if they go up it will cripple us".

I have to admire there economic genius, base rates are already at 0.5% and they are struggling. Did they say what rate the mortgage actually was?

This is the dilemma for the BoE if they increase base rates they will probably wipe out most new buyers and those who've continually MEW'd.

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