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First-Time Buyers Fix Deals In Droves As Rate Hikes Loom

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http://www.independent.co.uk/news/business/news/firsttime-buyers-fix-deals--in-droves-as-rate-hikes-loom-9270337.html

The share of first-time buyers fixing mortgage payments to ward off the impact of potential interest rate rises has reached an all-time high, according to figures compiled for The Independent.

The Council of Mortgage Lenders says 94 per cent, or 252,000 of the 268,800 first-time buyers who got on to the property ladder in 2013, took out fixed-rate deals, up from 83 per cent in 2012 and a record high.

The figures come as a rapidly falling unemployment rate (down to 6.9 per cent in the quarter to February) stokes expectations of an interest rate rise early next year or possibly even sooner.

The Government’s Help to Buy initiative has opened up the market for 95 per cent loan to value mortgage deals, which have more than doubled in the past 12 months. Of these deals, more than 80 per cent are fixed rather than tracker deals linked to the Bank of England’s official 0.5 per cent rate.

The average buyer on 95 per cent mortgage of £150,000 is currently paying £904 a month at rate of 5.31 per cent, compared to 6.53 per cent in August 2007, according to Moneyfacts.

Raise rates kill the economy, don't raise rates and kill the economy.

The base rate isn't going to move anywhere as the economy can't take it, the economy is a junkie hooked on cheap credit. There is no exit strategy as the "wealth" can't be destroyed.

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http://www.independent.co.uk/news/business/news/firsttime-buyers-fix-deals--in-droves-as-rate-hikes-loom-9270337.html

Raise rates kill the economy, don't raise rates and kill the economy.

The base rate isn't going to move anywhere as the economy can't take it, the economy is a junkie hooked on cheap credit. There is no exit strategy as the "wealth" can't be destroyed.

Abenomics is the exit strategy. Print the budget, print the deficit, print the debt interest. Printy, printy, print, print, print...

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Abenomics is the exit strategy. Print the budget, print the deficit, print the debt interest. Printy, printy, print, print, print...

Indeed. All evidence points to this and it is hard to see them coming up with anything else.

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Abenomics is the exit strategy. Print the budget, print the deficit, print the debt interest. Printy, printy, print, print, print...

Oh yes, I see now, all totally sustainable then.

(note to self: must buy more gold!)

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£931 a month repayment on £150k at 95%... Plus £7.5k down = £165k property that can be rented round here for about £700 a month...

Sounds sustainable...

Edited by disenfranchised

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I wonder if this could be the trigger, much like MIRAS in the 1980s?

MIRAS doesn't seem so bad at lested it would even up the advantages of home owners to BTL

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Osborne is relying on a feeling of prosperity, albeit a false one, emanating from rising house prices. Therefore I doubt he's going to increase rates before May 2015.

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Interesting post on Sober Look arguing that US disinflation has finally stabilised, the resurgent cost of commodities such as coffee and gasoline being the principal cause (UBS commodity index; gas futures, below). Last week's TIPS auction drew a record bid from foreign investors.

The necessary pre-conditions for a US rate rise now appear to be in place.

http://soberlook.com/2014/04/markets-beginning-price-in-us-inflation.html

DJ+UBS+commodity+Index.PNG

June+2014+(RBM14)+Gasoline+Futures.png

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Interesting post on Sober Look arguing that US disinflation has finally stabilised, the resurgent cost of commodities such as coffee and gasoline being the principal cause (UBS commodity index; gas futures, below). Last week's TIPS auction drew a record bid from foreign investors.

The necessary pre-conditions for a US rate rise now appear to be in place.

http://soberlook.com/2014/04/markets-beginning-price-in-us-inflation.html

DJ+UBS+commodity+Index.PNG

June+2014+(RBM14)+Gasoline+Futures.png

Jesus I hope so. Could push the HKD back up substantially against GBP/AUD/NZD - which I need!

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http://www.independent.co.uk/news/business/news/firsttime-buyers-fix-deals--in-droves-as-rate-hikes-loom-9270337.html

Raise rates kill the economy, don't raise rates and kill the economy.

The base rate isn't going to move anywhere as the economy can't take it, the economy is a junkie hooked on cheap credit. There is no exit strategy as the "wealth" can't be destroyed.

There is something in the air, i know of three cases of friends 2 buyers and one seller who have had the sale value reduced by the lenders surveyor, the buyers were happy the seller was not, The sellers value was below purchase price in 2007 so could not sell.

Edited by awaytogo

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Osborne is relying on a feeling of prosperity, albeit a false one, emanating from rising house prices. Therefore I doubt he's going to increase rates before May 2015.

It's not Osborne's decision.

However, I agree with the essence of your post: Osborne will do what he can to ensure there isn't a rise before the 2015 general election.

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