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Interest Rates Rise To 4.75%

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Guest Bart of Darkness

So this rise now takes us back to Aug 2004. Anyone remember what happened that autumn?

Floods in Bangladesh.

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I have always said our BoE was the best in the world :rolleyes:

If a quarter point cut back in August was enough to revive the housing market, which

now needs another cut to keep the ball rolling, what is a quarter point rise going to do? :o

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ROFLOL.

Yes, all of us non-homeowners are totally screwed by higher interest rates.

We won't be able to borrow as much money to buy these houses which are

just getting more and more expensive.

If interest rates continue going up only the mega-rich will be able

to get a mortgage as house prices continue climb into the stratosphere.

Do you seriously believe what you are saying?

That's a weasal argument - http://en.wikipedia.org/wiki/Straw_man

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I have always said our BoE was the best in the world :rolleyes:

If a quarter point cut back in August was enough to revive the housing market, which

now needs another cut to keep the ball rolling, what is a quarter point rise going to do? :o

To be honest, if they were the best in the world we wouldn't be in this mess.

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I think the sentiment towards owning property will gradually change from "I own, I'm making a fortune" to "Christ this millstone weighs a bloody tonne, Is it really worth two jobs?"

Which is what happened in the last crash. And since some people have to sell and since few people were buying, prices dropped and dropped and dropped until more people started buying again at the bottom of the crash.

Today, of course, we have such a massive oversupply of new 'investment properties' that the market will be absolutely flooded when the BTLs start selling. 'Executive flats' that sold new for 300k will be selling for a few quid on ebay or the local car boot sale...

Edited by MarkG

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For Fork's sake.

If interest rates rocket that's "great"- I am assuming that you all have the kind of jobs where recession won't affect you. I lived through the early 90's recession and anyone who thinks whoopeee a recession is a bit of a khunt if you ask me.

IF IRs are about to start shooting up it will cause a lot of people a lot of pain.

This as always been the case - we can't and won't have a house price crash without an economic downturn that will be VERY painful for many people.

Personally I look at as a serious global economic downturn that will be VERY painful for many people... with one minor characterise that UK house prices will fall.

The situation is far bigger than just the UK house market. I think a lot of people on HPC forget that and almost expect a HPC in isolation of the wider economic situation – that isn’t going to happen!

Edited by clv101

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That's a weasal argument - http://en.wikipedia.org/wiki/Straw_man

Thanks Halliron - he has a reputation for mis-representing the point!

"More likely: 1 more rate rise in this cycle (maybe), house prices aren't affected, people trying to get on the ladder will be worse off, due to higher repayments"

Do you work for the BBC?

They seem to be getting it all wrong today

Overgeared speculators are going to feel the pain that they shold have felt months ago,

but were saved from thanks to the unwarranted 0.25% cut of one year ago

I see the "MPC are muppets, GB controls them blah blah" posts have been replaced :lol:

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Guest Bart of Darkness
The situation is far bigger than just the UK house market

Waaaaaaaay bigger. I can't really see how the resolution can be anything other than spectacularly messy, regardless of what the BoE have done today.

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More likely: 1 more rate rise in this cycle (maybe), house prices aren't affected, people trying to get on the ladder will be worse off, due to higher repayments.

Agreed. BoE will be sitting on their hands for a while now to see how consumers react and hoping they don't react as bad the last time it went to 4.75%. I suspect we'll see people reign in the finances again in the absence of any hefty wage inflation.

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I think there is a lot of premature celebration going on here. Don't get me wrong . . . it's a good idea to put the IR up but all the vitriol aimed at people who've gone out and bought a place - for whatever reason - is a bit puerile. Sounds like sheer jealousy when people blame recent buyers for keeping prices high and, thus, out of reach. They begged stole or borrowed to get on the ladder and although that may have been foolish, it's stillnot nice to think of them being repossessed or going into negative equity. The only reason anyone would express glee at that is because they were frustrated at not being able to afford to buy themselves.

Prices were reasonable for an awfully long time and if you didn't get on board at the time, tough sh*t. What makes you think house prices are gonna drop THAT much anyway ? This is nothing like the late 80s early 90s. I was arranging countless mortgages back then and interest rates were at 7% before the madness of the ERM. Then they DOUBLED. I'm sorry but I just don't see that happening this time round.

If you're expecting a 50% "correction", might I suggest you smoke some more reefer and buy some more Pringles cos you've got a LONG wait.

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I think there is a lot of premature celebration going on here. Don't get me wrong . . . it's a good idea to put the IR up but all the vitriol aimed at people who've gone out and bought a place - for whatever reason - is a bit puerile. Sounds like sheer jealousy when people blame recent buyers for keeping prices high and, thus, out of reach. They begged stole or borrowed to get on the ladder and although that may have been foolish, it's stillnot nice to think of them being repossessed or going into negative equity. The only reason anyone would express glee at that is because they were frustrated at not being able to afford to buy themselves.

Prices were reasonable for an awfully long time and if you didn't get on board at the time, tough sh*t. What makes you think house prices are gonna drop THAT much anyway ? This is nothing like the late 80s early 90s. I was arranging countless mortgages back then and interest rates were at 7% before the madness of the ERM. Then they DOUBLED. I'm sorry but I just don't see that happening this time round.

If you're expecting a 50% "correction", might I suggest you smoke some more reefer and buy some more Pringles cos you've got a LONG wait.

When you were arranging those mortgages at 7% interest rate was the house price 3.5 times the buyers salary?

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Prices were reasonable for an awfully long time and if you didn't get on board at the time, tough sh*t.

Absolutely. It's tough shit for those just leaving university that their parents didn't buy a house for them in the mid-90s when they were twelve. It's tough shit for the next generation that their grand-parents didn't buy a house for them before they were conceived.

And that's _after_ you said:

Don't get me wrong . . . it's a good idea to put the IR up but all the vitriol aimed at people who've gone out and bought a place - for whatever reason - is a bit puerile.

So you think it's 'a bit puerile' to celebrate becasue house prices might return to sensible levels, but it's OK for you to tell people that it's 'tough shit' that they didn't buy a house in the 90s, when many people here weren't even out of school at that time?

Man, this increase has really brought out the hypocrites on this site.

If you're expecting a 50% "correction", might I suggest you smoke some more reefer and buy some more Pringles cos you've got a LONG wait.

About four years, at a guess.

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If you're expecting a 50% "correction", might I suggest you smoke some more reefer and buy some more Pringles cos you've got a LONG wait.

A lot of flats could be down 50% within the next 2 years. I don't reckon that's long to wait.

Houses and more desirable properties will probably see much more limited and slower depreciation.

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More likely: 1 more rate rise in this cycle (maybe), house prices aren't affected, people trying to get on the ladder will be worse off, due to higher repayments.

What happened to your perpetual wage inflation theory (due to the non-existence of globalisation?). Won't your theoretical perpetual wage inflation make repayments more affordable?

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Agreed. BoE will be sitting on their hands for a while now to see how consumers react and hoping they don't react as bad the last time it went to 4.75%. I suspect we'll see people reign in the finances again in the absence of any hefty wage inflation.

GS I will save our commonly held view on the likely scenario, and review it here at 6 monthly intervals. I'll bet we're right.

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Absolutely. It's tough shit for those just leaving university that their parents didn't buy a house for them in the mid-90s when they were twelve. It's tough shit for the next generation that their grand-parents didn't buy a house for them before they were conceived.

And that's _after_ you said:

So you think it's 'a bit puerile' to celebrate becasue house prices might return to sensible levels, but it's OK for you to tell people that it's 'tough shit' that they didn't buy a house in the 90s, when many people here weren't even out of school at that time?

Well not everyone here was in school around that time. Prices were at their lowest ebb around '94/'95. Only 10 years ago. I bought mine in '97 not for profit but just cos I needed a place to live and couldn't be arsed to rent. It ain't my fault the value quadrupled. The new generation of homebuyers have far more sophisticated lenders and schemes at their behest now. A lot of graduates are earning a shedload of money just a couple of years outta uni so why the bitching ? If you've gone to uni to do a home economics degree and are earning 20K now at M&S, you've only got yourself to blame. If you've come out with a real degree and you're earning £35-50K then there are lenders out there that will sort you out. If you think the prices are prohibitively high, then WAIT till they come down. As it states elsewhere on this site, there's nothing wrong or foolish about renting.

There's nothing to be gained by rejoicing in the suffering that others are going to experience just cos you didn't get on in time to make your gains.

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What happened to your perpetual wage inflation theory (due to the non-existence of globalisation?). Won't your theoretical perpetual wage inflation make repayments more affordable?

Perpetual? I won't be around to see that out! I think I said over the next 5 or so years.

Due to the non-existence of globalisation? You must have dreamt I said that.

Won't your theoretical perpetual wage inflation make repayments more affordable? No as affordable not more.

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  • 333 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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