Thursday, April 19, 2007

And now, the end is near…..

Mortgage lenders pull fixed-rate deals

Mortgage brokers said Tuesday's announcement of a shock rise in inflation had resulted in a rush of customers wanting to fix their mortgages before the Bank of England took action.

Posted by nearly30 @ 10:00 AM (682 views)
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28 thoughts on “And now, the end is near…..

  • Come repossessions!!!!!!!!!!!!!

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  • dohousescrashinthewoods says:

    Looks like a lot of human tragedy coming.
    Anyone know of good jobs in the Middle East or South America?

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  • not so fast c76,

    this means the first time buyers will dry up totally. and these people are probably already getting a decent deal on rent rates.

    hopefully the repo’s will first be the btlers, I cannot wait for the property crash porn programmes.

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  • Looks like i got there just in time, I am still paying part mortgage on my ex wife’s property and have just arranged another 5yr fixed.

    The property was also bought just before the house price madness about 10 years ago.

    I hope this is the beginning of the meltdown in house prices, I would like to one day buy another place for me to live in.

    Again it will be ordinary people that suffer, but I hope it brings back a sense of sanity to credit, house prices, loans, the whole system needs a good shake up.

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  • The real face of ‘customer service and value’ in the finance industry.

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  • I think the ‘regulars’ on this site have got it right, finally a HPC may be just around the corner.

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  • The number 2 comment made here brings back memories. In 2001 when the tech bubble burst, San Franciso’s airport was full of cars with the keys still in the ignition. Every developer from the developed world had gone home for a better life. If the same happens in London, it would be interesting.

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  • I do not agree it will be the “ordinary people” to suffer. Hard workers, savers, people with sense of financial responsibility will benefit. A few unlucky will have to sit on their properties for a while, but inflation will catch up in the end.
    It is the financially overstretched speculators, property cheerleaders, gullible “I want to make the quick buck”. No mercy!
    While you and I have been paying rising income/council taxes, there has been lots of tax free profits, if you havent noticed.
    Property speculators have made a mockery of people saving for their pensions or investing into real businesses.
    I stick to my guns… come repossessions!!

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  • Were any of you guys around in the late 80’s if so you will realise that the late 80’s was a period of exuberance that hasn’t been experienced before or since. People were going mad… The crash that followed was inevitable. Everyone thought the boom would last forever, thatcherism, the big bang, low taxes. Everyone is much more sanguine these days I mean for gods sake people are actually paying off credit cards and wage inflation is only 4-5%. Yes there may be a correction but it wont be a full blown crash!

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  • george monsoon says:

    Maddison…..

    Poppycock!

    The crash that is looming will be bigger and harder than anything gone before. I just hope I still have my job in the coming recession.

    People are paying off their credit cards, but most are paying the minimum and owe thousands… they are Mewed to the hilt and interest rates will hit hard. Earlier comments about affecting the normal person are correct in that it will be joe on the street who takes the rap for government mistakes and bank greed.

    I rent at the moment, I am so glad…. If I loose my job, at least my rent will be paid for me by other tax payers..

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  • maddison, “I mean for gods sake people are actually paying off credit cards”

    By MEWing.

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  • Shipbuilder says:

    Er, Maddison where are you living? – substitute interest rates for taxes and you’ve just described ‘these days’. People are in record debt – the country is awash with Chelsea tractors, plasma TVs,designer clothes….don’t buy the ‘correction’ nonsense. One rule stands above all here – a boom is always followed by a bust. Always. Since the beginning of time. Amen.

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  • Van Hoogstraten says:

    I don’t get the “shock” at the rise in the official rate of inflation. The only surprise was that the government failed to doctor the figure before it was released.

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  • I’m with George – with the amount people are having to borrow, due to HPI, means that relative to earnings – Interest Rates are more like 14% than the current 5.25%. So if we start getting 5.5%, 5.75% or even 6% figures – we are talking – what 15-17% relative Interest Rate figures.

    We are more like the 1980s than the 1980s – we are currently borrowing over £200bn in Consumer Credit (as part of £1.4 Trillion total borrowing), this compares to £50bn in Consumer Credit (as part of £400bn) we were borrowing in the early 90s.

    Oh and in the early 90s we had Interest Rates of 5.75% – down from a high of 15% in 1989.

    When the 1980s went pop – Interest Rates basically doubled in less than 2 years.

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  • Anybody who thinks that the current situation is not serious is deluding himself/herself. Counterfeit finacial systems/businesses/economies maintain a smiley sunny ‘everything is ok’ illusion until the last minute fooling their victims into believing that the good days will last forever. The change happens quickly and people get burnt badly.

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  • The Capitalist says:

    Well said George, and Sovietuk. This inept government, by losing control of the money supply, has caused inflation. It will not be easy to control without a period of high interest rates. History is repeating itself. Boom then bust – this one will be very big, perhaps the biggest.

    Inflation is theft of your money by the state. Hedge yourselves now – buy gold. Make sure it is kept where it cannot be expropriated by the state (when the crash happens).

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  • apparently the withdrawal of mortgage offers is triggering a “rush to buy” as if buying a property tomorrow would become more expensive because of the higher interests
    http://money.guardian.co.uk/property/mortgages/story/0,,2061197,00.html

    think about the undelying naivety of this approach, supported by insane media misinformation: when interest rates go up you expect asset prices to fall, therefore what is the reason for such a rush to buy

    These lenders talk complete nonsense:
    “The loss of many of the cheapest deals will hit first-time buyers particularly badly, many of who rely on the security of a fixed deal as they borrow increasing amounts to get on to the property ladder”. “It always comes back to first-time buyers, and without them the market stagnates. Fixed rates have to be the best advice for them because they have to borrow to their upper limits. Raising them will hit first-time buyers and in turn this hits the market. People will also be thinking twice about moving.”

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  • Bricksnmortarhaha says:

    Re: now versus the 80s – I’ve long been saying to my partner that the rampant consumerism of today makes the 80s look like a time of innocence and restraint. Never before has there been such an extreme obsession with material goods – surely the impending crash will reach new extremes too.

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  • george monsoon says:

    Everyone I know, who has a mortgage, is on a fixed rate deal. I don’t know anyone who is on a variable rate mortgage. This must mean most people in the country are in the same boat. Oh DEAR!!!

    If fixed rate mortgages stay out of the equation for a few months or a year, many existing fixed deals will have expired and with no alternative to variable rates, a lot of overstretched people are going to fall victim to reposession due to arrears.

    I predict the crash will hit home well before Christmas. ……. and I sincerely hope the BTL’s are the first to go pop.

    Now if I can just stay in employment long enough to reep the benefits….

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  • george monsoon says:

    should have said “REAP” not reep…

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  • GM said “I predict the crash will hit home well before Christmas. ” – I don’t think this will happen – We might see interest rates hit 6% by Xmas – I could even see them reaching 6 % before the end of the summer, however this is not enough to trigger a crash – a slow down maybe – It will be the early part of next year when jobs start to go, the economy feels the increase in prices on oil as well as those filtering through from China. I do believe the crash is coming though – and yes I would agree that I am expecting it to be much bigger than the 89 – 92 one.

    My guess is the period from the summer of 2008 thru a 5 year period is going to be a tough time – it may last much longer 10 – 15 years.

    What will trigger a crash earlier will be a major international event, like another 7/11, USA invaiding Iran, Bird Flu outbreak – the economy is too strong at the moment to be influenced by just a 1 -2% increase in base rates – they need to head back over the 8% mark to really hurt.

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  • Did I really say that was the deal? Now silly me, what I meant was come back next week er month. I’ll do you a deal then, I think. It’s just that well, er, um, I’ve lost my cofidence.

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  • “the economy is too strong at the moment to be influenced”

    Are you sure about that? Unemployment up 21,000, inflation at its highest for 15 years, the pound so strong it makes our exports very expensive, stock market very jumpy. If that’s a rock solid economy I’d hate to see an unstable one!

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  • george monsoon says:

    I agree that its a million to one chance that something may happen to trigger a meltdown, but ,.,,

    as they say million to one chances happen 9 times out of 10

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  • The Eternal Optimist says:

    Do I detect a prevailing tone of smugness? In fact, few will be immune from a concatenation of forthcoming disasters shortly heading our way.

    Consider: The UK’s indigenous gas/oil fields started their decline in 1999, and are declining at a current rate of approx 4% pa. The Exchequer has lost £bns in revenue this past year alone, as a direct result. Our energy requirements will be dependent on pipelines from, amongst others, Russia – where we are near the end of a very long queue of potential rivals for increasingly scarce resources.UK coal peaked in the mid 1920s – when the population was only a fraction of what it is today. The next generation of nuclear reactors will take decades to commission, and will probably never run profitably. We don’t have enough arable land to feed ourselves, and increasing amounts of even that are being given over for the production of bio-fuels. The US is poised to attack Iran, as part of its occupation strategy for the middle-east, and its domination of remaining oil supply from that region. If the Straits of Hormuz get blocked, we’ll all be stuffed. Similarly, international tensions are growing over Africa and its potential oil resources. The huge Burgan oil field is in decline; ditto Cantarell; the largest – Ghawar – upon which we all depend – has never been accurately audited, and we’re effectively planning our economic futures on whatever fictional figure the Saudis tell us they have left to produce. And that’s before we even get to climate change.

    Remember: during every ‘economic downturn’; ‘depression’; ‘recession’; ‘correction’ in the past – the resources were always still in the ground to pick up the pieces once the speculators had finished having their fun. This is no longer the case. Multiple-crises wise – we’re now in virgin territory. Once the general public wakes up to that fact, I expect house prices to be the least of our problems.

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  • I disagree p.o.o.r, it’s a bubble, just like tech shares — people buy them because they think they will go up in value. Once the find out they don’t. It’s like a hosue of cards.

    yes people need to live in houses, but we’re not talking about houses for lvining in, we’re talking about houses to generate cash – either by BTL, or MEWing.

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  • Shipbuilder says:

    Ha! You’re well named, Eternal Optimist! I agree, though.

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