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Realistbear

Major E A Savills: I R Will Go Up By Another .50%

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http://www.citywire.co.uk/News/NewsArticle...enuKey=News.IFA

Base rate is expected to rise by another 0.5% according to chartered surveyors and estate agents Savills but house prices
could
still rise by 7% by the end of 2007.
‘We have already warned that a prolonged spell with interest rates at or above 5.5% could put the brakes on growth rates in the UK housing market,’ said Yolanda Barnes, a director of Savills.

Putting on a brave and very optimistic face. UP 7%? Dream on, by the end of the year zero YoY HPI would be a good result.

Edited by Realistbear

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I have a question to all.

Why is it that banks are still lending money below the base rate?.

And surely the interest rate rises might reign in business spending and unsecured loans, but if banks have access to funds that are obviously outside of the UK then the impact of rate rises on housing will be negligable?.

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I have a question to all.

Why is it that banks are still lending money below the base rate?.

And surely the interest rate rises might reign in business spending and unsecured loans, but if banks have access to funds that are obviously outside of the UK then the impact of rate rises on housing will be negligable?.

SVRs are not below the base rate.

Lending below the base rate is to gain business at a loss.

What is looking very likely for buyers now on fixed deals is that they will be in NE when the deals finish and then it'll be straight to SVR rates and who knows where they might be in a few years...7%...8%...possibly even 9%. Be interesting to see how they figure paying those mortgage repayments.

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I have a question to all.

Why is it that banks are still lending money below the base rate?.

And surely the interest rate rises might reign in business spending and unsecured loans, but if banks have access to funds that are obviously outside of the UK then the impact of rate rises on housing will be negligable?.

Sub-prime market is still in funds.

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I am seeing fixed mortgage deals at 4.95% without tie ins, how are they making money on this?.

Secondly, if the Bank of England just print lots of money as is currently the case then lend to the banks at x% interest, then in effect interest rates are another tax?. And the more money that is printed, the less the money already in circulation is worth.

Is it not the case that this Government have printed bucket loads of money, thus reducing sterlings real value in the UK, and creating massive inflation in house prices which is where the bulk of this printed money has ended up. ?.

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Guest wrongmove
I am seeing fixed mortgage deals at 4.95% without tie ins, how are they making money on this?.

You can buy 30 year Treasuries at 4.56% - the yield curve is inverted, i.e. long term IRs are less than short term (base rate)

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Guest d23
http://www.citywire.co.uk/News/NewsArticle...enuKey=News.IFA
Base rate is expected to rise by another 0.5% according to chartered surveyors and estate agents Savills but house prices
could
still rise by 7% by the end of 2007.
‘We have already warned that a prolonged spell with interest rates at or above 5.5% could put the brakes on growth rates in the UK housing market,’ said Yolanda Barnes, a director of Savills.

Putting on a brave and very optimistic face. UP 7%? Dream on, by the end of the year zero YoY HPI would be a good result.

poor journalism from citwire yet again

nowhere in that piece do Savills say that interest rates will rise 50% nor do they say they are expecting it; they give their prediction to how the market would react to IR hikes which makes the title of the piece (and this thread) pretty misleading.

it's also probably worth pointing out that the quotes from Savills are from before the last IR hike also and are based on what would happen if the BOE raised by .5% when in fact as we know they raised by .25% instead.

Edited by d23

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I have a question to all.

Why is it that banks are still lending money below the base rate?.

And surely the interest rate rises might reign in business spending and unsecured loans, but if banks have access to funds that are obviously outside of the UK then the impact of rate rises on housing will be negligable?.

do you know of any UK banks that have used oversees money to directly finance mortgages?

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http://www.citywire.co.uk/News/NewsArticle...enuKey=News.IFA
Base rate is expected to rise by another 0.5% according to chartered surveyors and estate agents Savills but house prices
could
still rise by 7% by the end of 2007.
‘We have already warned that a prolonged spell with interest rates at or above 5.5% could put the brakes on growth rates in the UK housing market,’ said Yolanda Barnes, a director of Savills.

Putting on a brave and very optimistic face. UP 7%? Dream on, by the end of the year zero YoY HPI would be a good result.

Is this the same Savills that said 20% in 2007 only 2 months ago????!

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Base rate is expected to rise by another 0.5% according to chartered surveyors and estate agents Savills but house prices could still rise by 7% by the end of 2007.

‘We have already warned that a prolonged spell with interest rates at or above 5.5% could put the brakes on growth rates in the UK housing market,’ said Yolanda Barnes, a director of Savills.[/indent]

Putting on a brave and very optimistic face. UP 7%? Dream on, by the end of the year zero YoY HPI would be a good result.

How can they honestly predict HPI with IR going up & credit tightening? I wonder if those muppets really think HPI can beat Interest rate rises. Somebody needs to remind them that they can't have their cake and eat it. We have had low interest rates & HPI for years, thanks to Brown's miracle economy, but now low interest rates are history so will be the house price inflation. Simple as that.

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