Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

The Times: Home Loan I R Are About To Rise

Recommended Posts

http://business.timesonline.co.uk/article/...2189396,00.html

Housing market

The Sunday Times May 21, 2006

Home loan rates heading higher

Homeowners who are not on fixed-rate deals were warned last week that they could soon face higher monthly payments, writes Jessica Bown.
Philip Williamson, chief executive of
Nationwide building society, one of Britain’s biggest lenders, said that life could soon get even more difficult for homeowners
if, as expected, the next move in rates is up.
Williamson said: “The money markets clearly expect the next rate move to be up. My gut feeling is that they are right and that the change could come later this summer.”

This leaves very little time for people to get out--the escape window is about to shut and then the rush for the exits begins.

Share this post


Link to post
Share on other sites

Philip Williamson, chief executive of Nationwide building society, one of Britain’s biggest lenders, said that life could soon get even more difficult for homeowners if, as expected, the next move in rates is up.

I see a lot of articles talking about it becooming difficult for home-owners, those who intend to stay in their homes. And articles saying how things are getting difficult for potential buyers, those who want to buy a house. But no-one ever says that interest rate rises or similar will make things difficult for sellers. If IRs go up, squeezing affordability, then surely sellers will have even more difficulty finding someone who both wants to buy their house, and also can afford it.

Billy Shears

Share this post


Link to post
Share on other sites

If IRs go up, squeezing affordability, then surely sellers will have even more difficulty finding someone who both wants to buy their house, and also can afford it.

As affordability (and, I hope, financial realism) becomes more of an issue, particularly if a succession of rates rises are forecast, then buyers will change their behaviour and sellers (if they are to sell) must respond. There cannot be an indefinite stand off and this must surely inject downward momentum into house prices. After all, it was only a few months ago that buyers were being told that interest rates had peaked. The fact that rates can keep going up will be a shock to many, and after such a long time on hold a couple of rates rises will be headline news for a while. In our quest for a House Price Correction (I've given up on a Crash unless something extraordinary happens) we need the appropriate economic conditions combined with a strong bearish message in the media to change public opinion on house values. It feels as if we are very close now...

Share this post


Link to post
Share on other sites

Luckily, I recently fixed my mortgage for 5 years, allowing me time for my wages to increase. It will also allow me 5 years to laugh at people who didn't take out fixed rate deals!

Laughing at people less fortunate then you.. nasty..

Good luck with your career.. :)

Share this post


Link to post
Share on other sites
Luckily, I recently fixed my mortgage for 5 years, allowing me time for my wages to increase.

So let me get this right:

If interest rates drop, you'll be paying more than you would with a variable-rate mortgage.

If interest rates rise, the value of your house will drop, so you'd have been better off not buying.

Somehow I'm not convinced that you'll be the one doing the laughing.

Share this post


Link to post
Share on other sites

I have to agree. If there is a slow steady decline (say over 5 years) in house prices, you will be far less likely to sell early as you have the millstone of a hefty penalty to pay (I guess).

The fear of being trapped may affect your ability to laugh.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.