Saturday, April 21, 2007

HPC gets a mention in this article

Is your mortgage about to go through the roof?

This article discusses the likely extent of interest rate rises and their impact on mortgages, and the wider economy.

Posted by paulm @ 08:31 AM (566 views)
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20 thoughts on “HPC gets a mention in this article

  • bidin'matime says:

    Some sound comment, eg “A housing market collapse will undermine confidence in sterling, preventing the Bank of England from cutting rates and prolonging the downturn,” says ABN Amro.

    And HPC.co.uk gets a link too.

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  • little professor says:

    “While the pessimists on sites such as housepricecrash.co.uk were feasting on the ABN report, the big lenders said there is no need to panic. ”

    Woot!

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  • <>

    I think it’s time to send a clear message to the public that the age of cheap credit is over and a belt-tightening begins here. The crash will have to happen, better to prepare and have a manageable one ( if that’s at all possible), than to try and resist the inevitable, and create more misery in the end.

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  • Sorry just found out you can’t copy and paste a quote from an article… the bit I was commenting on was the possiblity of Mervin King pushing to raise IRs by 0.5% as opposed a mere 0.25% next month.

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  • little professor says:

    The inflation hawks are saying that the bank’s governor, Mervyn King, may want to show his inflation-beating credentials by pushing through a bigger-than-usual 0.5% rise, to 5.75%, in May. Last week, Mr King was put in the humiliating position of having to write to the Chancellor to explain why inflation, as measured by the CPI index, had broken through the 3% level. On other measures, such as the RPI figure used for settling wage claims, inflation is now at a 10-year high of 4.8%.

    How’s that?

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  • Sitting Tight says:

    The biggest sign yet that the downturn is about to commence – Harry Enfield back on tv last night peddling the same jokes as in the late 80s!!!! Here we go again. Woohoo

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  • I wouldn’t be at all suprised to see a 0.5% hike this time. ‘Expectations’ are getting ‘out of hand’ (due to the fact that inflation is out of hand!) and the Bank has to maintain its ‘credibility’ in pretending to fight inflation.

    Inflation is far higher than stated by even RPI, and just about everyone is aware of this now.

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  • Little Prof

    Why do you think Mr King was put in the humiliating position of having to write to Crash Gordon. He probably didn’t find it humiliating all all. To be humiliated you have to be concerned about what you are doing, and have a sense of pride. This clearly isn’t the case and so Mr King couldn’t possibly feel humiliated. If he was concerned, he would have spoken out soon that interest rates should rise.

    Secondly, I recall some newspapers commenting that, statistically, inflation would be out of the target zone for as much as 40% of the time. IF THE MEDIUM TERM PREDICTIONS ARE THAT CPI INFLATION WILL RETURN TO THE TARGET ZONE WITHOUT FURTHER RATE RISES, THEN THERE WILL NOT BE ANY FURTHER RISES. Oh dear. More swervin’ from Mervin then.

    (Sorry is this is garbage; I’m working out of the country at the moment and getting a paper or an internet connection is proving difficult).

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  • Considering the level of debt in this country is so high I’ve always believed there is very little slack within households to cover higher repayments. Unless the lack of slack is tested and the number of forced sellers increases dramatically I don’t really see a crash as likely but stagnation will kick-in exhibiting itself as small falls and small rises.
    The two really big unknowns are the extent that rates will have to rise to control inflation. Last year I commented on here that I would not be surprised in the slightest to see rates at 6.0% at the close of 07. I feel more comfortable than ever with that statement. Rates at 6.0% will stretch the householder but may not force them to sell but it may become fashionable at dinner parties to talk of selling ones “BTL” to invest in the latest fad. BTL could flock to the exits. I know that if I currently owned BTL that had been in my portfolio for at least a few years I would be seriously considering offloading them as the returns are diminishing if non-existent and there is more money to be made elsewhere.

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  • “The Bank of England is likely to pay attention to underlying mortgage trading figures which indicate that the market could cool down sooner rather than later, removing the need for interest rate rises.”

    Hang on… I thought interest rates were used to control CPI, which doesn’t include mortgage costs (directly, at least). Lazy journalism.

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  • tr,

    The BofE’s medium term predictions from a while ago predicted that inflation would have calmed by now. Mervyn is simply managing expectations – in truth they’ve no idea what inflation will do, but if they make soothing noises and emphasize that “there’s no need to panic” then they think that maybe … just maybe … it will all be alright.

    However when people start losing confidence in the BofE’s ability to control the economy then there’s trouble ahead. These inflation statistics are the first inkling that the MPC is not in the driving seat any more.

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  • My question is – as a group of maybe 100 people contributing regularly to this blog, what can we do to maximize our visibility in the media and complain for the partial, misleading propaganda? Actions like flooding stupid media with comments and complain letters should be planned by us as a group. If we get the HPC site mentioned in the FT, that would be a good step forward.

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  • Confused76, you should tell people that the banks are preparing for a 20-40% reduction in house prices as they are. Not to mention the story about the tory councilor that was prostituting his wife in order to pay his mortgage. And what about the 500 people who are leaving the UK every day? All of these have been in recent past articles.

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  • 21 April 2007
    Nationwide chief economist Fionnuala Earley ……We do think interest rates are going to go up, but only by 0.25%. We are not expecting much more than that.”

    28 December 2006
    “Ms Earley predicted that UK interest rates had “peaked” at 5%.” (BBC – 6213549.stm)

    .

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  • sold 2 rent 1 says:

    confused76,

    There is no need to do anything.
    Events are taking their course naturally.

    I figure by the end of 2007 the stock market would have been seriously rattled.
    The world will be waking up to the biggest hangover in history.
    The housing market will be positioned on a cliff edge.

    Notice the lack of glorious, no HPC et al.
    We will never hear from these guys again – although I bet they are reading all the posts

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  • george monsoon says:

    I would prefer that the MPC fail to meet their obligations and freeze interest rates in May. Thus, inflation will snowball and HUGE interest rate rises will then be unavoidable. It could hasten what we all need to happen. Now can I buy a home yet?

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  • speculatorone says:

    I have been listening to radio 4 today. The money programme had an article about interest rate rises, and a woman said if the rate goes up .5% her payments will be more than she earns!!

    What a position to be in, another who has believed all Brown’s hype that rates are under control!$!££”!

    Well done labour, are we about to see another cycle of family life wrecking?…………………

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  • bidin'matime says:

    [can someone tell me how to make links like that hyper-text?]

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  • The last line in the article is significant. The change to the Bond market.

    If it is truly recovering, it will be to this market that the money released from sold BTLs will head. More material for the “Fashionable Chat” at dinner parties. Stuff financial advisors, people pay far more attention to what they hear from friends.

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