Accept It - The Force Is Too Great

[Bloo Loo]

Do you foresee a return to the days when you had to save with a building society for a year or two and wait patiently for the funds to be available?

dont you?

[lets get it right]

dont you?

Not really. In those days the credit markets were regulated by law. They are not now. It would take a change of heart by the government and, as it would cause a recession and house price crash, it is not going to happen in the next 2.5 years.

And, of course, banking is a global business these days. Hard to regulate within one economy.

[PropertyGuru]

Not really. In those days the credit markets were regulated by law. They are not now. It would take a change of heart by the government and, as it would cause a recession and house price crash, it is not going to happen in the next 2.5 years.

And, of course, banking is a global business these days. Hard to regulate within one economy.

I've no idea why you lot are bothering to argue with this trolling tithead. As if he knows what's going to happen next year. None of us do. All we can do is mention the MOST LIKELY scenario.

This troll is so desperate, he is constructing fantasy scenarios of 'free money' in his head, and spouting them like they have some realistic chance of happening.

Worst xmas coming up.

repos up in the spring.

house prices down

on the balance of probabilities, any SANE person would say...game over.

[Bloo Loo]

Not really. In those days the credit markets were regulated by law. They are not now. It would take a change of heart by the government and, as it would cause a recession and house price crash, it is not going to happen in the next 2.5 years.

And, of course, banking is a global business these days. Hard to regulate within one economy.

How about the fact that the money markets are drying up, getting worse daily as more and more CDO's are being valued less and less.

My view is that the banks worldwide need cash. They need it to make up for the losses incurred above. Sub prime losses havent really started yet in the UK and Australasia.

They get money by lending - yes- but they will need to lend with sensible criteria and with a margin in interest and a margin for safety. This means Higher LTV, higher interest and higher checks on ability to pay- LONG TERM.

They also get money on the money markets- If they can get it at all this money is getting more expensive.

They also get money from savers. As all the banks are involved, there will be competition for our cash- hence rates will still remain attractive for savers.

Yes, Its going to get very tough for borrowers, and It may get as serious as having to wait for a mortage

[babesagainstmachines]

You proclaim a credit crunch. I observe there is still plenty of credit around to keep the housing market going.

Nice one.

What you are failing to see is the people who can get the credit now are the more prudent and sensible, who know that they can rent risk free and cheaper than buy. The sort of people who don't want to take on the ridiculous amounts of debt that the "current" prices requires. The sort of risk-averse people who will stay well clear of a falling market. That's why prices will come down and will continue to do so.

Only an idiot would look just at the repayments in today's interest rates. The idiots that can't get a mortgage anymore.

[The Spaniard]

Don't worry about people like that Dogbox, they are simply racists who think they are anti racists, except that doesn't exist, just the racist. Amazing how they think these things up and then blame you for their racist thoughts!

Is it PC to be a racistist, i.e. someone who is predjudiced against racists?

Edited December 7, 2007 by The Spaniard

[roadtoruin]

I've no idea why you lot are bothering to argue with this trolling tithead. As if he knows what's going to happen next year. None of us do. All we can do is mention the MOST LIKELY scenario.

This troll is so desperate, he is constructing fantasy scenarios of 'free money' in his head, and spouting them like they have some realistic chance of happening.

Worst xmas coming up.

repos up in the spring.

house prices down

on the balance of probabilities, any SANE person would say...game over.

Totally agree with PG for once... Banging on and on about lowering rates and elections, it's all paranoid delusional pessimism. Of course we could be in the same position of affordability as 6 months ago but the whole point is the oil tanker SS sentiment has now finally turned, and that's the lynch-pin to the whole game.

Affordability is immaterial now in the medium term - it's HPI steaming downwards now until sentiment and market indicators change/coincide, probably at least a couple of years. Perhaps LGIR has got so used to living in his slough of despond he can't imagine another reality.

[lets get it right]

Totally agree with PG for once... Banging on and on about lowering rates and elections, it's all paranoid delusional pessimism. Of course we could be in the same position of affordability as 6 months ago but the whole point is the oil tanker SS sentiment has now finally turned, and that's the lynch-pin to the whole game.

Affordability is immaterial now in the medium term - it's HPI steaming downwards now until sentiment and market indicators change/coincide, probably at least a couple of years. Perhaps LGIR has got so used to living in his slough of despond he can't imagine another reality.

Interesting this. Suggest a viewpoint that does not fit in with the crowd and the crowd get very agitated. Astonishing too how people can turn things around in their heads.

"Banging on and on about lowering rates and elections, it's all paranoid delusional pessimism." Err, the government are lowering rates and they will be desperate to avoid a recession before the next election. Or maybe you think they are going to stand by and let it all go tits up? They may, or may not, be able to control events. But to regard someone who thinks they will try as suffering from 'paranoid delusional pessimism' is, to say the least, interesting.

You seem to think that nothing they can do will affect how things turn out. Exactly the same sentiment prevailed during 2005. One little interest rate cut and it was all over again.

Are you so blinded by your desires that you think the lowering of interest rates will have no affect on sentiment?

Edited December 7, 2007 by Lets' get it right

[lets get it right]

Nice one.

What you are failing to see is the people who can get the credit now are the more prudent and sensible, who know that they can rent risk free and cheaper than buy. The sort of people who don't want to take on the ridiculous amounts of debt that the "current" prices requires. The sort of risk-averse people who will stay well clear of a falling market. That's why prices will come down and will continue to do so.

Only an idiot would look just at the repayments in today's interest rates. The idiots that can't get a mortgage anymore.

You truly are dazed and confused. How many people do you know who WANT to 'rent risk free and cheaper than buy'. Most people do it from necessity, not choice. There are not many people choosing not to take on the ridiculous amounts of debt that current prices require. Those that can afford it do, those that cannot afford it, don't. This is, of course, a generalization but don't make the mistake of extrapolating the views of a couple of dozen people on here and assuming that is how everyone thinks and behaves.

How many idiots can't get a mortgage anymore?

[Disillusioned]

OK, I've read the first three pages of this thread and then skipped to a reply (because I got bored of the repetition), so I apologise if I'm saying exactly what others have said (which, ironically, is more repetition!).

This is the way I see it (please note that there is no obligation for you to see it the same way):

BoE gradually increases rates : this was done in an effort to head inflation off at the pass. All going fine so far, and already having an effect on HPI to a certain extent - as shown by reduced HPI BEFORE....

...the credit crunch: there are many consequences of this, but the relevant one is that this effectively hiked mortgage rates up by another percentage point - something that wasn't factored into the BoEs interest rate decisions. So now the rates that directly affect HPI are now 1% higher than the BoE intended when the increased the base rate. So...

The BoE reduce the base rate by a quarter point: with another 3/4s of a percent of further reductions expected. The BoE are simply trying to reflect the 'unexpected' credit crunch in their rate decisions. Rates are too high now, in the BoEs opinion, but only because the credit crunch occurred, so they are now being lowered. We saw HPI dropping even before the credit crunch, so it will continue to do so, because the rates are effectively 3/4s of a point higher than they were before it occurred.

I hope that reads OK. I don't think I have time to redo it today.

[lets get it right]

How about the fact that the money markets are drying up, getting worse daily as more and more CDO's are being valued less and less.

My view is that the banks worldwide need cash. They need it to make up for the losses incurred above. Sub prime losses havent really started yet in the UK and Australasia.

They get money by lending - yes- but they will need to lend with sensible criteria and with a margin in interest and a margin for safety. This means Higher LTV, higher interest and higher checks on ability to pay- LONG TERM.

They also get money on the money markets- If they can get it at all this money is getting more expensive.

They also get money from savers. As all the banks are involved, there will be competition for our cash- hence rates will still remain attractive for savers.

Yes, Its going to get very tough for borrowers, and It may get as serious as having to wait for a mortage

Go down to Nationwide today and ask for a mortgage. See if they'll give you one. See what rates they offer and conditions they impose. If the outcome is that you can't afford to buy - well, you're priced out. Someone earning a bit more than you won't be. They'll buy. You won't. The market will stumble on.

Next year interest rates will be lowered again and people will keep borrowing and buying houses.

[lets get it right]

OK, I've read the first three pages of this thread and then skipped to a reply (because I got bored of the repetition), so I apologise if I'm saying exactly what others have said (which, ironically, is more repetition!).

This is the way I see it (please note that there is no obligation for you to see it the same way):

BoE gradually increases rates : this was done in an effort to head inflation off at the pass. All going fine so far, and already having an effect on HPI to a certain extent - as shown by reduced HPI BEFORE....

...the credit crunch: there are many consequences of this, but the relevant one is that this effectively hiked mortgage rates up by another percentage point - something that wasn't factored into the BoEs interest rate decisions. So now the rates that directly affect HPI are now 1% higher than the BoE intended when the increased the base rate. So...

The BoE reduce the base rate by a quarter point: with another 3/4s of a percent of further reductions expected. The BoE are simply trying to reflect the 'unexpected' credit crunch in their rate decisions. Rates are too high now, in the BoEs opinion, but only because the credit crunch occurred, so they are now being lowered. We saw HPI dropping even before the credit crunch, so it will continue to do so, because the rates are effectively 3/4s of a point higher than they were before it occurred.

I hope that reads OK. I don't think I have time to redo it today.

It reads great. Unfortunately it ignores the fact the market runs on sentiment and when in a rate lowering cycle sentiment progressively becomes more positive.

[lets get it right]

I've no idea why you lot are bothering to argue with this trolling tithead. As if he knows what's going to happen next year. None of us do. All we can do is mention the MOST LIKELY scenario.

This troll is so desperate, he is constructing fantasy scenarios of 'free money' in his head, and spouting them like they have some realistic chance of happening.

Worst xmas coming up.

repos up in the spring.

house prices down

on the balance of probabilities, any SANE person would say...game over.

Calm down lad. You're in danger of believing your own publicity.

[Minesapint]

It reads great. Unfortunately it ignores the fact the market runs on sentiment and when in a rate lowering cycle sentiment progressively becomes more positive.

Which particular rates have been lowered that will improve sentiment - I hardly think Halifax lowering its SVR to 7.5% is going to kick start it all again. Until we have fixed rate deals below 5% again (and without ridiculous arrangement fees) we are NOT in a rate lowering cycle!

[lets get it right]

Which particular rates have been lowered that will improve sentiment - I hardly think Halifax lowering its SVR to 7.5% is going to kick start it all again. Until we have fixed rate deals below 5% again (and without ridiculous arrangement fees) we are NOT in a rate lowering cycle!

Why pick the most expensive lender in the market.

Nationwide's SVR is 6.99% now.

Throw in a couple of IR cuts next year and they'll be down to 6.49%.

Nationwide are offering 5 year fixed NOW for 5.63%

Nationwide are awash with money to lend.

[Minesapint]

Why pick the most expensive lender in the market.

Nationwide's SVR is 6.99% now.

Throw in a couple of IR cuts next year and they'll be down to 6.49%.

Nationwide are offering 5 year fixed NOW for 5.63%

Nationwide are awash with money to lend.

Thats the rate Natiowide were offering before the BOE cut so no rate cut there. 6.49% SVR great thatll get the market going I think not. And I wouldnt want to be one of those lucky people coming off 4% fixed rates onto 6.5% (after youre assumed cuts next year) a lovely 62.5% increase.

[bearbullfence]

So, to sum up, it's the ones that can't pay we should be looking at, not the ones that can afford to pay.

Ahh, I see... millions of people can't afford a Fararri - are we expecting a FPC (Fararri price crash)?

[Injin]

Ahh, I see... millions of people can't afford a Fararri - are we expecting a FPC (Fararri price crash)?

We would be if they had all borrowed at silly salary multiples to get one, yes.

[lets get it right]

Thats the rate Natiowide were offering before the BOE cut so no rate cut there. 6.49% SVR great thatll get the market going I think not. And I wouldnt want to be one of those lucky people coming off 4% fixed rates onto 6.5% (after youre assumed cuts next year) a lovely 62.5% increase.

They are offering a 5 year fix now at 5.63%. Next year after a couple more rate cuts it will be 5.03%. Moving from 4% to 5% - not going to break the bank for most people.

Why do you assume people will come off a fixed rate deal and be forced onto SVR?

[Minesapint]

They are offering a 5 year fix now at 5.63%. Next year after a couple more rate cuts it will be 5.03%. Moving from 4% to 5% - not going to break the bank for most people.

Why do you assume people will come off a fixed rate deal and be forced onto SVR?

Why not thats still a 25% increase (plus dont forget those arrangement fees that are now being charged). I'd say a 25% increase in a households main expense is cause for concern.

As for you comment re SVR. lets look at all those 100% mortgages or self cert of the last few years a large chunk of those arent going to be able to get a nice fixed rate.

Anyway why do you assume that rate cuts are going to be passed onto fixed rate deals - the last one hasn't

[roadtoruin]

It reads great. Unfortunately it ignores the fact the market runs on sentiment and when in a rate lowering cycle sentiment progressively becomes more positive.

That's all right then - next month or after another cut in January we'll expect HPI return and mortgage approvals increase.

I'll look forward to you bumping this thread. (but won't hold my breath)

[Guest portwinestain]

Nationwide upped it's tracker by 0.15% a couple of days ago, so the net rate fall is actually 0.1%. Source: Moneyweek.

[Benedict]

Are you so blinded by your desires that you think the lowering of interest rates will have no affect on sentiment?

Even beyond sentiment it'll give those on variable rates enough extra cash to spend each month that it keeps the economy going better.

[Minesapint]

Even beyond sentiment it'll give those on variable rates enough extra cash to spend each month that it keeps the economy going better.

Yeah that extra £15 a month will really help - well it will until council tax goes up and the basic rate tax changes take place in April.

[Benedict]

Why pick the most expensive lender in the market.

Nationwide's SVR is 6.99% now.

Throw in a couple of IR cuts next year and they'll be down to 6.49%.

Nationwide are offering 5 year fixed NOW for 5.63%

Nationwide are awash with money to lend.

Britannia are offering 5.39% for 5 years with only a 1k arrangement fee, no higher lending charge up to 90% LTV and many of those coming off 2005 fixes will have at least 10% equity by now. Some article on the front page saying the average 2005 2 year fix was 4.8, it's not going to cripple many people going up to 5.39.

It's just not the same as people going from 2% teaser rates to 8% subprime rates, it's a kick in the finances but it's not a death blow to anyone who wasn't already barely able to cope.