Friday, Aug 04, 2006

Rate rise upsets those with a vested interest

FT: Borrowers hit after interest base rate rise

Had to force myself into a wry smile with this one.
Paul Smith, chief executive of Haart estate agents said, The current economic situation is not strong enough to justify a rise in rates. This could significantly dampen activity in the market.

Posted by denzil @ 06:30 PM (474 views)
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6 Comments

1. harold said...

"But Cotton advises: If you are thinking of buying a property now then dont hang around."

Nice try Cotton - my advice, if you are thinking of buying a property now, don't.

Oh, and tagged onto the end of this VI nonsense is a crumb of common sense:

"The flipside to the rise, however, is better returns on saving accounts."

Alleluia.


Friday, August 4, 2006 06:41PM Report Comment
 

2. markd said...

Funny that, according to some of the articles we've seen recently the housing market was on the verge of a new boom-what was it the National Housing Federation report was saying, a 50% rise over the next few years? Now all of a sudden a tiny rise in rates could significantly dampen the market! Makes no sense does it-unless of course house prices are already massively overblown and a huge chunk of the population is already in debt up to their eyeballs.

Friday, August 4, 2006 07:45PM Report Comment
 

3. Thesqueeze said...

I cannot believe there is all this reaction....it's only .25%, historically that's nothing. Maybe it just proves things that a lot of people on this forum have been saying for a long time, the economy is built on sand and it is subsiding under its own weight. What really irritates me though is all this nonsense like the above article, and others that came out today that make it look like the BoE rate setting commitee have done this to be spiteful or something....they find it as objectionable as a bad fart in a lift...well sniff it up I say.

The heads have come out of the sand and they are peering round at each other, by Monday they will be back in the sand though, so another .25 before christmas would be just the tonic to tip this over.

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

4. paul said...

Absolutely, harold.

Do not buy right now.

Markd don't be surprised, they'll be bullshitting all the way, right until their heads disappear under the water.

Friday, August 4, 2006 09:58PM Report Comment
 

5. Veritas said...

What all these VI's fail to mention of course is that the monthly cost of a mortgage is made up of 2 elements, the capital sum borrowed, and the applicble interest rate.
Never once do the VI's raise concerns about the former. Affordability is much more a factor of the substantial sums needed to be borrowed by people today than of the BOE interest rate being raised by 0.25% to 4.75%.
It's no wonder VI's are so despised. They only ever whinge about the minor aspect of the problem whilst burying their collective heads up their ar*es if ever confronted about the major problem.

Friday, August 4, 2006 10:31PM Report Comment
 

6. Btloptingout said...

Absolutely Veritas!

A few years back no-one would have dreamed of using the overly simple housing affordability index of "loan amount * BOE base rate".

Affordability is a complex calculation based on more than just the debt servicing cost......and must take average earnings to price ratios, capital repayment and economy outlook into account.

Now that things are starting to stack up against the marketing spin of "loan amount * BOE base rate" affordability indicator expect VI's to abandon it in droves.

Saturday, August 5, 2006 11:53AM Report Comment
 

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