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Thought you might be interested in a couple of anecdotes

Case 1: Friends bought in Kent for £105 in Feb '04. Now having to sell as the can no longer afford it. Should make a profit at this stage, but very little cushion against a fall.

Case 2: Colleague in bought in SE London in '03. Not sure about the purchase price but got a 1 year fix at 3.5%. Has suddenly realised that after Jan she will no longer be able to afford it.

Case 3: colleague bought in Essex in April. Didn't get a fixed rate. Now has only £50 spare cash a month to live on after mortgage, Council Tax, Travel etc

Sure, it's only 3 cases, but if I know 3 people in trouble, how many others are there out there???

My own finances would benefit from a crash, but it ain't gonna be pretty for some of my chums :(

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If prices fall I will benefit (I'll be able to afford a home for a start!)

But two friends have bought recently and although they are ok at the moment as far as the future is concerned, either I'll be happy, or they'll be happy. Its not gonna be rosy for all us.

One friend who bought with her husband recently, the mortgage is £100 MORE than her monthly salary. Don't know what the husband earns but I'm hoping its a lot...

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I despair sometimes

It's less than 4 years since rates were at 6%, yet now they rise to 4.75% (still around the lowest levels for 50 years) and suddenly we find people coming under pressure with their repayments. As well as numerous vested interest groups complaining about "cripplingly high interest rates". I mean hello! Is this thing on!

Interest rates are still at emergency low levels in response to the 2001 attacks in New York and the dot com bust the previous year.

High interest rates are 10% plus, not 4.75%.

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I despair sometimes

It's less than 4 years since rates were at 6%, yet now they rise to 4.75% (still around the lowest levels for 50 years) and suddenly we find people coming under pressure with their repayments.  As well as numerous vested interest groups complaining about "cripplingly high interest rates". I mean hello! Is this thing on!

Interest rates are still at emergency low levels in response to the 2001 attacks in New York and the dot com bust the previous year.

High interest rates are 10% plus, not 4.75%.

Could not agree more, it would not even be conceivable in the early 90's ...

I fixed at 14.65% (1991 I think) on a £56k mortgage, that is nearly £700 a month in interest alone. Add to that a rather miss-sold endownment we did not go out much.

Variable rates were 16% at the time.

Forget crash, it would be armageddon if that happened again.

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There are still low, yes. It's worrying to think that as the BOE were lowering rates, each tick down added a vast amount of money for people to spend. And they spent it. (I still don't believe the BOE saying that it went into financial assets).

Recession was averted as planned, and Gordon Brown's fabulous prudent economy spluttered on (still only at 2% GDP growth despite this massive injection of money). Now the BOE have to turn this off this tap of cheap money because it caused an asset bubble. Worse than that, if people decide they want to pay off some of the money they spent, it will actually take money OUT of the economy.

And once sentiment has turned, the BOE have little room to manoeuvre - they can only drop rates a few percent.

The next few years could be very interesting :ph34r:

I wonder, if we had joined the euro, would we have pulled it apart by now? If rates had been around 2%, think of the asset inflation! It would overshoot hugely and then the correction would be catastrophic. I know Spain is going through this now, as they have effectively got negative real rates, but Spains economy is small compared to the rest of Europe.

Soros would made money somehow.

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It seems to me that this current situation is not driven by interest rates alone; it's essentially about affordability and FTB simply can't afford to buy property. Also, the confidence factor has evaporated - the mode of thinking has been: "buy while you still can", "don't miss the boat", etc. fuelled by bullish players like Allsopp & Spencer. Now, the buyers are drying up as they simply can't afford it and the thinking is: "Wait till prices drop", "rent a bit longer."

So even if rates stay the same, I expect the market to fall...

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People in the early 90's and all the way up to 1998 paid less than 100,000 for a decent house. Repayments were well in line with peoples salaries. The desperation to get on the housing ladder and buy at these totally crazy prices has caused this problem.

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Also, the confidence factor has evaporated

Very true, the recent FTBs I've talked to are nervous - "it won't go down that much will it? We brought last year, so we should be OK".

This is very different to a few years ago, when people were saying "you wouldn't believe how much cash I've made on my flat! It's gone up 100k!"

I think we are well past the top, and some of the bulls are getting less bullish.

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  • 440 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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