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Base Rate up but mortgage rates still lower than three months ago


adarmo

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HOLA441
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HOLA442

Quite this rise today means little we are back where we were just over a year ago. GBP is still dropping traders don't believe there will be another one. Mortgage rates are low and Nationwide has just reduced again this week. All this wishful thinking about debtors being thrown under a bus is bizarre. I've blocked @TheCountOfNowhere but i guess he is pretty excited about this rise. Hope it results in a crash like his "are the shires crashing thread?" which has been off for so long. Looking at trumps Fed appointment today i suspect that is where interest rate rises end for now.

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Just now, thewig said:

Great thread. Would read again.

 

Oh man, why did you do it...it was almost of the end of the first page, confined to history, ignored,.

The best thing Carney has done today is out the trolls.

They must be wondering today what is going on.  They've bought  into this new paradigm for a decade only to be betrayed. 

Turns out that new paradigm is an old paradigm, same old shysters talking the gullible for every penny.

Who'd have thought it.

 

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HOLA448
44 minutes ago, TheCountOfNowhere said:

The IRs are meaningless to the mortgage rates, it's when TermFunding ends is when we see the Fun

Agreed

Quadruple ended shafting

  • Low rates pushed house prices up
  • Low savings rates shafted savers
  • Low rates pushed savers into property rising prices
  • The banks are on the governments tit

Morally a disgusting aberration of a policy which makes us akin to a third world country.

"Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or—here’s a classic Kremlin bailout technique—the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk—at least until the riots grow too large."

https://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/307364/   

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HOLA449

Fair use snippet from within a more detailed subscription article about the Base Rate rise (not FT) - with a view the rise is directly because the economy is weak (overall forecast productivity at just 1%) and prone to inflation, thus meaning higher interest rates to push back against that inflation.

(Not that I agree with all of that - rout out the BTLers, get house prices down, and let's get economy going again - people buying homes, upsizing, buying in shops... instead of BTL rentier HPI speculation land.)

Quote

HSBC Tracker mortgages increase by 0.25 per cent today. Standard variable rate mortgages and saving rates are “under review”.
Nationwide Tracker and standard variable rate mortgages increased by 0.25 per cent yesterday. Savings rates increase by 0.25 per cent for those who received a cut of 0.25 per cent in last year’s rate reduction.
Barclays Tracker and variable rate mortgages increase from December 1. Savings rates are under review.
Lloyds/Halifax All tracker and standard variable rate mortgages increase by 0.25 per cent from December 1. Savings rates are under review.
NatWest/RBS Tracker mortgages at Royal Bank of Scotland and NatWest increased yesterday by 0.25 per cent. Other variable rate mortgages and savings rates are under review.

 

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58 minutes ago, Venger said:

Fair use snippet from within a more detailed subscription article about the Base Rate rise (not FT) - with a view the rise is directly because the economy is weak (overall forecast productivity at just 1%) and prone to inflation, thus meaning higher interest rates to push back against that inflation.

(Not that I agree with all of that - rout out the BTLers, get house prices down, and let's get economy going again - people buying homes, upsizing, buying in shops... instead of BTL rentier HPI speculation land.)

HSBC Tracker mortgages increase by 0.25 per cent today. Standard variable rate mortgages and saving rates are “under review”.
Nationwide Tracker and standard variable rate mortgages increased by 0.25 per cent yesterday. Savings rates increase by 0.25 per cent for those who received a cut of 0.25 per cent in last year’s rate reduction.
Barclays Tracker and variable rate mortgages increase from December 1. Savings rates are under review.
Lloyds/Halifax All tracker and standard variable rate mortgages increase by 0.25 per cent from December 1. Savings rates are under review.
NatWest/RBS Tracker mortgages at Royal Bank of Scotland and NatWest increased yesterday by 0.25 per cent. Other variable rate mortgages and savings rates are under review.

What a surprise - the mortgages are practically all going up instantly, but the saver rates are practically all "under review". Shysters.

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8 minutes ago, dpg50000 said:

What a surprise - the mortgages are practically all going up instantly, but the saver rates are practically all "under review". Shysters.

Radio 4 a moment ago.  They had a lady on from Virgin Money (I think it was the Chief Exec - Jayne-Anne Gadhia) and asked her if VM going to pass the interest rate on for savers.  

She carefully answered that VM 'always looks to what rest of banking sector does, and then tries to do better' - she thought entire banking sector would pass it on for savers, 'especially for new customers and the young'.   (My memory).

I took the view it's going to be savers who have to search out for better rates.   

Oh and then there was a lot of stuff about house prices being solid/stable, with a happy tone of voice.   Yet there were also some points about making sure those taking mortgage can afford them, and something similar for unsecured debt (and it's said that lenders generally are easing back on unsecured debt in future months - I've had one overdraft limit cut recently).

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18 hours ago, Mr Banks said:

Quite this rise today means little we are back where we were just over a year ago. GBP is still dropping traders don't believe there will be another one. Mortgage rates are low and Nationwide has just reduced again this week. All this wishful thinking about debtors being thrown under a bus is bizarre. I've blocked @TheCountOfNowhere but i guess he is pretty excited about this rise. Hope it results in a crash like his "are the shires crashing thread?" which has been off for so long. Looking at trumps Fed appointment today i suspect that is where interest rate rises end for now.

I think he blocked me too. Then made a comment about everyone ignoring this thread which is a shame because it's bizarre to ignore the reality that for 90% of mortgagees on fixed rates nothing just happened, and actually fixed rates on good ltv are lower now than a few months ago. 

Japan syndrome is my bet but we'll have to wait and see

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HOLA4414

Oh and from memory the VM lady did say the vast majority of mortgages are fixed rate.

(Although as I recall it there are many on quite expensive SVRs too - struggling to qualify for better rates.)

Not sure if can rely on this one as a source.  Not got time to search out a better source.

Quote

 

Are too Many Homeowners Stuck on Pricey SVR Mortgages?

Apr 12, 2017 

....As well as the 4 million homeowners with an SVR mortgage, L & C Mortgages also warns that a further 1.1 million households are wasting approximately £2.78 billion by sitting on the wrong type of mortgage deal.

https://www.tepilo.com/blog/2017/04/are-too-many-homeowners-stuck-on-pricey-svr-mortgages

 

2016 about 1 guy http://www.telegraph.co.uk/personal-banking/mortgages/the-great-mortgage-rate-divide-some-pay-099pc-others-are-stuck-o/

https://www.moneywise.co.uk/news/2017-09-12/mortgage-prisoners-face-losing-to-6500-year

All those equity rich/outright owner homes as well though.

What matters is what buyers into future will/won't pay sellers for houses.  Whether houses to market pick up.  Sentiment change etc.  Unlikely to change quickly imo.

S24 ratcheting down on BTLers though.  3% SDLT surcharge.

There's never much housing on the market in areas I search - just 4-5 pages per area on RM.   And what has been on market always gone SoldSTC pretty quickly at ever higher prices last 2 years.  Needs a tilt.  There's a few inherited homes (by looks of things) and if money tightens (rates + stress-testing), can hope more such sellers will look to take lower offers... values found/set at the margin.  Although sellers may just about keep matching those willing to pay these prices (out of their own adult market-choice free-will decisions, with their own market view, as per our ACA friend recent buyers at something toward £500,000. )

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4 hours ago, adarmo said:

I think he blocked me too. Then made a comment about everyone ignoring this thread which is a shame because it's bizarre to ignore the reality that for 90% of mortgagees on fixed rates nothing just happened, and actually fixed rates on good ltv are lower now than a few months ago. 

Japan syndrome is my bet but we'll have to wait and see

I don't expect mass repossessions, but hopefully this rise will put a bit of a lid on hpi - if it is correct to assume that one of the primary constraining factors for new buyers is monthly affordability of their payments.

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5 hours ago, adarmo said:

I think he blocked me too. Then made a comment about everyone ignoring this thread which is a shame because it's bizarre to ignore the reality that for 90% of mortgagees on fixed rates nothing just happened, and actually fixed rates on good ltv are lower now than a few months ago. 

Japan syndrome is my bet but we'll have to wait and see

mortgagors

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19 minutes ago, btd1981 said:

I don't expect mass repossessions, but hopefully this rise will put a bit of a lid on hpi - if it is correct to assume that one of the primary constraining factors for new buyers is monthly affordability of their payments.

I'd love to see future HPI consigned to the dustbin and everyone just accepting that it's not the best way to wealth. 0.25% raise though is like trying to stop Chernobyl melting down by popping over there next week and peeing on the dead reactor. Deffo too little and deffo too late. I guess at the very meanest and tightest of margins the rate increase would have a tiny impact on someone buying with a tracker but in reality the rise is not enough to impair lending multiples. Far from it. IIRC I was stress tested to 10.99% on the mortgage at my multiples. 

I don't think fairly minor interest rate rises will have any impact on the property market, but more so on the wider economy. People would sooner cut back on a bottle of wine or a night out once a month for each 0.25% increase imho rather than sell the house. the fall in aggregate demand takes the pressure of wider price rises and that's one of the reasons why it's a useful inflation tool. That said I do not doubt for one minute that very loose and cheap credit has blown prices to the levels we have today. If rates went up to 5% it would be a different story. 

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5 minutes ago, adarmo said:

I don't think fairly minor interest rate rises will have any impact on the property market, but more so on the wider economy.

It could be that the minor increase in interest rates might sow the seeds of doubt in the minds of those who think property prices only ever go up and interest rates only ever go down

Edited by Option5
stupid error
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HOLA4420

Mortgage payers are foolish to wish lower rates when to do so only means their next home will cost more, so will have to earn more to pay ever more.......equity is dead money only the very few will be able to actually spend it and to do so they will have to sell, if not selling that spending so often will not be the kind of spending one would wish to purchase given the choice....so often your equity will be spent by another, their source of income not yours.;)

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1 hour ago, winkie said:

Mortgage payers are foolish to wish lower rates when to do so only means their next home will cost more, so will have to earn more to pay ever more.......equity is dead money only the very few will be able to actually spend it and to do so they will have to sell, if not selling that spending so often will not be the kind of spending one would wish to purchase given the choice....so often your equity will be spent by another, their source of income not yours.;)

True but it's about selling a property that inflates more than the ones your buying. I sold a flat bought early 2013 went up 60% bought a house 5 miles away that had gone up 26% since early 2013. So worked for me and all those London wankers moving out the capital 

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6 hours ago, Option5 said:

It could be that the minor increase in interest rates might sow the seeds of doubt in the minds of those who think property prices only ever go up and interest rates only ever go down

This is it. This mega bubble has been fuelled on sentiment for the past few years, the late entrants needing more and more reassurance from the establishment that they’re not the greatest fools in history. People taking on thirty years or whatever of DEBT at (by default) the end of the credit cycle are quite literally; buying the top.

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HOLA4423
36 minutes ago, thewig said:

This is it. This mega bubble has been fuelled on sentiment for the past few years, the late entrants needing more and more reassurance from the establishment that they’re not the greatest fools in history. People taking on thirty years or whatever of DEBT at (by default) the end of the credit cycle are quite literally; buying the top.

I hope you're right. I'm feeling pretty disheartened recently, that there will be a 'correction' taking years at best. I don't have long enough to wait, and I suspect many are in the same boat! I need a swift crash!

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HOLA4424

Its difficult to see how the damage of the last four years can be undone. A fall to 2013 prices I expect would require a crisis that will also wipe out my savings and shares...slow falls in real terms are no good for me...i need the falls to be as fast as the gains...

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12 hours ago, Wayward said:

Its difficult to see how the damage of the last four years can be undone. A fall to 2013 prices I expect would require a crisis that will also wipe out my savings and shares...slow falls in real terms are no good for me...i need the falls to be as fast as the gains...

Why do you need it to be a fast fall? Why is a slow fall no good for you?

just interested.

do you think there is any way of having a fast fall that isn’t because of other wide reaching implications for the economy that might damage more people (including those hoping to buy at much lower prices)?

im interested because in theory a big drop in house prices would be good for me, but I can’t shake the feeling that it would come with many other negative consequences 

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