Friday, Aug 04, 2006

How will the interest rate hike affect house prices?

MoneyWeek: How will the interest rate hike affect house prices?

MoneyWeek were among the few commentators to get it right on yesterday's rate rise - here's what they reckon it means for house prices.

Posted by mary @ 11:00 AM (517 views)
Add Comment
Report Article

13 Comments

1. The Bald Man said...

This is a good sensible well balanced article far away from the usual hype.

Friday, August 4, 2006 11:25AM Report Comment
 

2. kpjcomp said...

We dont want to be smug but we feel it's only fair to point out that we were among the very few pundits to call yesterdays interest rate decision correctly.

And of course the many talented people here.. :)

Friday, August 4, 2006 11:33AM Report Comment
 

3. Retiredbanker said...

At last the MPC has bowed to the inevitable and raised rates, but not by nearly enough.

What an idiotic decision to cut the rate in August last year- unbelievable!

Friday, August 4, 2006 12:12PM Report Comment
 

4. paul said...

The MPC later candidly admitted that the last August rate cut was a mistake.

They didn't bother to put it right though, and by waiting, inflation is going to soar as it's already fed through to wage bargaining (at least in the public sector). Unemployment is still rising too, which contributes as well.

Friday, August 4, 2006 12:29PM Report Comment
 

5. Distant_daz said...

I must admit that during the first few months of the year I was becoming a little disillusioned with it all - we all knew something would happen eventually but I was getting sick of waiting. I now genuinely beleive that this increase in base rate, as small as it is, will have a massive impact upon sentiment and I believe that this will be more significant than the financial impact. Combined with the higher profile of bad debt, personal insolvancies, increases in repossessions, rising unemployment I beleive that we can now say that 'all the fundamentals are in place for strong house price DEPRECIATION in the short to medium term!!!' Where are all the VI's crowing about how great things are now?? I'd factor in another rise before xmas, or maybe early new year, then whatch all the BTLers panic and drop their FTB homes on the market! A friend had an offer accepted during the markets steppest growth phase (2 ish yr ago) only to be dumped, the house then being placed back on the market for 15K more. Lets see how this works in reverse: Desperate to sell?? - I'll give you 100k today, or 85k in 2 months time if you drag your heels!! Actually, I won't chase the market down, I'll sit back and watch the pain first - why would I want to lose a chunk of my hard earned deposit to save some BTLers arse? 'Some negative equity for you sir??' No ta!! I can wait!!

Friday, August 4, 2006 01:46PM Report Comment
 

6. harold said...

Yes, I found it astonishing that Merv admitted that the cut last August was "probably a mistake", but then waited until now (i.e., after causing further damage and heartache) to do something about it. Savers have been disregarded for too long.

Friday, August 4, 2006 02:14PM Report Comment
 

7. Monty said...

Even a broken watch is correct twice a day. Not that I'm stepping in to defend the so called pundits but most were calling for or predicting a rate increase, just not now. By their own admission they were surprised by the timing. The MPC performs major surgery every month with a very blunt instrument. They do not care about your desire to own a postage stamp sized piece of the British Isles. They do care about the high levels of consumer debt (fueled by the availability of cheap credit) and keeping inflation down despite higher commodity prices all the while trying not to stunt this nation's economic growth. Neverthless, they may be impressed by your credentials as an economist. I'm told there are two positions available.

Friday, August 4, 2006 03:46PM Report Comment
 

8. monty said...

Even a broken watch is correct twice a day. Not that I'm stepping in to defend the so called pundits but most were calling for or predicting a rate increase, just not now. By their own admission they were surprised by the timing. The MPC performs major surgery every month with a very blunt instrument. They do not care about your desire to own a postage stamp sized piece of the British Isles. They do care about the high levels of consumer debt (fueled by the availability of cheap credit) and keeping inflation down despite higher commodity prices all the while trying not to stunt this nation's economic growth.

Friday, August 4, 2006 04:09PM Report Comment
 

9. bidin'matime said...

Property group YourMove said: The 0.25% increase will put some potential buyers off making their purchasing decision, not just because of this rise which in real terms is quite small, but because any rate rise knocks confidencethere is now a risk of the housing market slowing downwe need first time buyers to be able to come to the market with confidence, not worried about what will happen round the corner to interest rates.

Isn't it just heart-warning to hear the VIs singing our song for once!

Friday, August 4, 2006 10:50PM Report Comment
 

10. sebastian said...

Hehe, spot on bidin'matime. If someone is making the largest investment they will probably ever make in their life they should be thinking about what might happen around the corner anyway!

Friday, August 4, 2006 11:08PM Report Comment
 

11. This comment has been removed as it was found to be in breach of our Blog Policies.

 

12. This comment has been removed as it was found to be in breach of our Blog Policies.

 

13. This comment has been removed as it was found to be in breach of our Blog Policies.

 

Add comment

  • If you do not have an admin password leave the password field blank.
  • If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines
Username  
Admin Password
Email Address
Comments

Main Blog | Archive | Add Article | Blog Policies