Depressedpedro Posted August 23, 2022 Share Posted August 23, 2022 53 minutes ago, cbathpc said: If the gov does nothing on energy prices, won't that have the same effect as raising interest rates? Demand will be destroyed by that alone, raising interest rates ontop of that isn't just demand destruction its cratering the entire economy. Basically yes, the energy rises are really going to be quite severe for alot of people. Its also why I do think the govt will HAVE to give out some more support, perhaps quite sizeable, otherwise things are going to get real rough for the general public. Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted August 23, 2022 Share Posted August 23, 2022 35 minutes ago, scottbeard said: Nice work. Personally I WOULD overpay that, since interest rates could be much higher in 5 years time and meanwhile your mortgage payment remains low no matter what inflation and interest rates do. If you have 5 years of 5-10% pay rises and 1% mortgage interest that's not a bad outcome even if house prices go down a bit in the short term! Pointless overpaying a 1% mortgage when you can get 2% on your easy access savings. Even paying top rate tax, if you can get savings interest of 1.8%+ it makes sense. Just pay the balance when it comes to the time remortgage. Quote Link to comment Share on other sites More sharing options...
fellow Posted August 23, 2022 Share Posted August 23, 2022 3 hours ago, TheCountOfNowhere said: Dont worry, prices are still London levels of mental round us and people are still buying. I dont get it myself, maybe people are buying now before they miss out. I guess they are rushing to buy before rates go even higher, without any consideration for the effect rate increases would have on prices? Most people really are this shortsighted. Quote Link to comment Share on other sites More sharing options...
Flat Bear Posted August 23, 2022 Share Posted August 23, 2022 1 hour ago, rollover said: What about wages to catch up with rising inflation? I understand this is being worked on as I type. If you have not noticed strike action in the UK or people just leaving their jobs yet, you very soon will do. Employers need to pay up or have no staff, or maybe a very poor quality of employee, either way they will not survive. The number of days lost to strike action (something I havn't heard for 40 years or more) is mounting up. Quote Link to comment Share on other sites More sharing options...
HousePriceTooHigh Posted August 23, 2022 Share Posted August 23, 2022 With an 18% inflation prediction, whats to say it won't actually be 25% by spring? Or higher still? "It can't happen" --- until it does. Nothing at all indicates a reduction in gas prices in the near term. What awaits the UK? The end of the pound The end of the UK (breakup of the union) The end of the failed neoliberal economic system The end of the conservative party for a generation Quote Link to comment Share on other sites More sharing options...
TheResponsibleHouseBuyer Posted August 23, 2022 Share Posted August 23, 2022 This is it now. If we don't get some form of HPC with all what's going on its never happening. Anecdotally, just checked my Rightmove saved properties and they all gone sold STC again (+5/10% more in asking for the same model house on the street . Must have been the holiday period that slowed the market (why do i listen to RM's version of events lol). My worry now is a mortgage costing 7% interest + NO HPC + £5k energy bill on top of all the other inflationary pressures + stamp duty tax etc. FFS! Quote Link to comment Share on other sites More sharing options...
HousePriceTooHigh Posted August 23, 2022 Share Posted August 23, 2022 Imagine spending £6000 a year heating you ""3 bedroom"" new build persimmon home, purchased at £400k with a 40% HTB loan. Quote Link to comment Share on other sites More sharing options...
Flat Bear Posted August 23, 2022 Share Posted August 23, 2022 3 minutes ago, HousePriceTooHigh said: With an 18% inflation prediction, whats to say it won't actually be 25% by spring? Or higher still? "It can't happen" --- until it does. Nothing at all indicates a reduction in gas prices in the near term. What awaits the UK? The end of the pound The end of the UK (breakup of the union) The end of the failed neoliberal economic system The end of the conservative party for a generation I do not think we will see 25% CPI inflation in the first half of 2023. It could well be the case by the end of 2023 beginning of 2024 though. I think the BOE would have to admit that inflation is persistent by then but I wouldn't put money on it as they use the new excuse of Ukraine or maybe a newer excuse. We are in a very dark place. Quote Link to comment Share on other sites More sharing options...
nightowl Posted August 23, 2022 Share Posted August 23, 2022 (edited) Looking at the history of natural gas prices it seems today's costs aren't unprecedented. I do wonder if we have reached a hypersensitivity to any bad news state of madness. Edited August 23, 2022 by nightowl Quote Link to comment Share on other sites More sharing options...
Flat Bear Posted August 23, 2022 Share Posted August 23, 2022 5 minutes ago, TheResponsibleHouseBuyer said: This is it now. If we don't get some form of HPC with all what's going on its never happening. Anecdotally, just checked my Rightmove saved properties and they all gone sold STC again (+5/10% more in asking for the same model house on the street . Must have been the holiday period that slowed the market (why do i listen to RM's version of events lol). My worry now is a mortgage costing 7% interest + NO HPC + £5k energy bill on top of all the other inflationary pressures + stamp duty tax etc. FFS! Hmmm This is a very good sign that we could see a house price crash. One of the best indications. It will be when the majority of posters on this site think that is a very bad time to buy as prices only go down and mortgages are much too expensive and they just can't afford to buy the baby a bonnet. We may only need 2 years or so for this sentiment to embed in. The more prices fall the more uncertain people are on buying. Exactly the same as last time and similar in a way to the stock market, fear and exuberance Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 23, 2022 Share Posted August 23, 2022 1 hour ago, 2buyornot2buy said: Don't bother overpaying that. Fire the money in some easy access savings accounts. You'll get close to 2% now, probably 3%+ in a few months. shhhhh that's what I'm doing. although there are annual repayment limits so I am not making the most of them Quote Link to comment Share on other sites More sharing options...
scottbeard Posted August 23, 2022 Share Posted August 23, 2022 3 minutes ago, Flat Bear said: It will be when the majority of posters on this site think that is a very bad time to buy as prices only go down and mortgages are much too expensive and they just can't afford to buy the baby a bonnet. We may only need 2 years or so for this sentiment to embed in. I really hope it's faster so I can move in late 2023. Fingers crossed! Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted August 23, 2022 Share Posted August 23, 2022 1 minute ago, Si1 said: shhhhh that's what I'm doing. although there are annual repayment limits so I am not making the most of them If you can really be bothered you can open up a load of regular savings accounts and get around 3% now. Usually there's caps of £200-£500 you can save a month. Personally thinks its a lot of effort when rates will probably be at 3% before Christmas anyway but it all helps in the arbitrage. Quote Link to comment Share on other sites More sharing options...
desiringonlychild Posted August 23, 2022 Share Posted August 23, 2022 I have put my flat on the market and looking for a bigger flat as the London flat market is down... But its probably better to wait until 2023... Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 23, 2022 Share Posted August 23, 2022 2 minutes ago, 2buyornot2buy said: If you can really be bothered you can open up a load of regular savings accounts and get around 3% now. Usually there's caps of £200-£500 you can save a month. Personally thinks its a lot of effort when rates will probably be at 3% before Christmas anyway but it all helps in the arbitrage. tbf I haven't got much spare cash right now anyway because of the standard indulgences in a new house, or necessities etc the absence of beige is such a change from renting life however Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 23, 2022 Share Posted August 23, 2022 3 minutes ago, desiringonlychild said: I have put my flat on the market and looking for a bigger flat as the London flat market is down... But its probably better to wait until 2023... now that's smart - most people upgrade when the market is high because they fail to do basic arithmetic having said that can be tricky to sell in a slow market, but then again you're in London Quote Link to comment Share on other sites More sharing options...
Social Justice League Posted August 23, 2022 Share Posted August 23, 2022 2 hours ago, Warlord said: I told you about this ages ago. We're headed for Banana Republic territory. And the next phase people on here won't like: Authoritarian Marxism to rise. We're following the trajectory of Venezuela. Totally agree. IR's at 7% isn't high by historic standards but too many people don't even know what APR is, so they have no chance. Just bankrupsy and/or repossession awaits millions of the feckless. Quote Link to comment Share on other sites More sharing options...
Lagarde's Drift Posted August 23, 2022 Share Posted August 23, 2022 19 minutes ago, nightowl said: Looking at the history of natural gas prices it seems today's costs aren't unprecedented. I do wonder if we have reached a hypersensitivity to any bad news state of madness. The futures market is rife with speculation. I really don't know where gas prices are heading but everyone is saying up and only up. Which may well be mistaken. Quote Link to comment Share on other sites More sharing options...
winkie Posted August 23, 2022 Share Posted August 23, 2022 No way can house prices keep up with inflation when wages are not, savings are not and debt interest is becoming more expensive, like energy prices.......even the markets and foreign exchange are vulnerable.........cutting taxes is no sticking plaster. Quote Link to comment Share on other sites More sharing options...
desiringonlychild Posted August 23, 2022 Share Posted August 23, 2022 16 minutes ago, Si1 said: now that's smart - most people upgrade when the market is high because they fail to do basic arithmetic having said that can be tricky to sell in a slow market, but then again you're in London It can be tricky but then if you are not in a rush...My parents and mother in law bought their current homes in a falling market in the 1990s. They are likely to die in these house so even though they sold their previous homes at a loss, i can't say they have done badly. Quote Link to comment Share on other sites More sharing options...
steve99 Posted August 23, 2022 Share Posted August 23, 2022 1 hour ago, Si1 said: That isn't exactly how fixed rate mortgages work - for each tranch of a particular product, say 2% fixed over 5 years, a corresponding tranche of bonds at the same interest rate (minus a spread to give the bank a profit) has been sold to the money markets. The holders of these bonds (not the banks) will be sitting on losses as they'll obviously now be receiving very low returns on their bond investments compared to the current market. Whether that translates into the bond market as a whole having a hissy fit and wanting higher risk-rates etc for future mortgage bonds is another question and may in effect do what you say above anyway. Yes, I don't really understand how it works in detail. I can imagine the word 'Risk' has reappeared in bankers and bond buyers dictionaries after having been removed over a decade ago. Quote Link to comment Share on other sites More sharing options...
Depressedpedro Posted August 23, 2022 Share Posted August 23, 2022 39 minutes ago, nightowl said: Looking at the history of natural gas prices it seems today's costs aren't unprecedented. I do wonder if we have reached a hypersensitivity to any bad news state of madness. Take a look at the price per therm though which is where the real story lies, rather different looking chart, the previous peak during 05-06 was 108p during November 2005. Current prices are around 550p, so about 5.5x HIGHER than that peak. Forecasts are for about 700-750p during Dec-Feb, so around 7x higher. THAT is why the price of gas is SO much higher than previously seen, because it IS light years higher than ever seen before! Quote Link to comment Share on other sites More sharing options...
PeanutButter Posted August 23, 2022 Share Posted August 23, 2022 58 minutes ago, Flat Bear said: I understand this is being worked on as I type. If you have not noticed strike action in the UK or people just leaving their jobs yet, you very soon will do. Employers need to pay up or have no staff, or maybe a very poor quality of employee, either way they will not survive. The number of days lost to strike action (something I havn't heard for 40 years or more) is mounting up. Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 23, 2022 Share Posted August 23, 2022 22 minutes ago, Lagarde's Drift said: The futures market is rife with speculation. I really don't know where gas prices are heading but everyone is saying up and only up. Which may well be mistaken. Commodities markets are notoriously cyclical I believe. Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 23, 2022 Share Posted August 23, 2022 15 minutes ago, desiringonlychild said: It can be tricky but then if you are not in a rush...My parents and mother in law bought their current homes in a falling market in the 1990s. They are likely to die in these house so even though they sold their previous homes at a loss, i can't say they have done badly. No individual has ever bought and sold assets with perfect timing. Ever. Quote Link to comment Share on other sites More sharing options...
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