Tuesday, January 11, 2011

The psychology of ZIRP?

Ongoing low mortgage rates create an ‘interest rate-spoilt’ generation

A fascinating poll which was mentioned 'en passant' in today's Metro. While it's only a poll of over 2000 respondents, it provides an interesting insight into how almost two-years of 0.5% base rate has - unsurprisingly - effected an expectation of equally cheap credit. This can only end in tears. Karen Barrett, Chief Executive of unbiased.co.uk comments, “With the base rate now remaining at a record low of 0.5% for 21 months, possibly 22 months after next Thursday’s base rate decision, our tracked research shows this has had a dramatic effect on homeowners’ rate expectations."

Posted by sibley's b'stard child @ 09:24 AM (1381 views)
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4 thoughts on “The psychology of ZIRP?

  • mark wadsworth says:

    Absolutely staggering. The Metro article said people on SVR would only be willing to go to a fixed rate if they could get 3.3% or lower.

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  • So low interest rates are becoming baked into the economy and Cameron announces that the banks have to lend more and house prices continue to slide albeit slowly.

    Still looks an awful lot like Japan to me.

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  • I suppose this really is just another way for people to express that there is a limit as to what they able/prepared to pay for property. Which has to be a positive.

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  • sibley's b'stard child says:

    I guess so BW, although that would be predicated on the assumption of borrowing sensible amounts which would have been an illuminating poll to run in tandem with the above.

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