I've made an offer - investment rule number one "buy when no one else is2

Dan:_4

dopester wrote: »

the banks have only just begun tightening the lending screw.

Are you sure dop? Banks are now slowly starting to compete with each other for business again and slowly reducing mortgage rates.

Before you jump down my throat im not saying that this means everything will turn around and prices will start rising. Mortgages are still expensive, esp for high LTV.

WTF?_2

Dan: wrote: »

Are you sure dop? Banks are now slowly starting to compete with each other for business again and slowly reducing mortgage rates.

Before you jump down my throat im not saying that this means everything will turn around and prices will start rising. Mortgages are still expensive, esp for high LTV.

Mortgages are actually remarkably cheap when compared to the medium term.

They're only expensive when compared to the crazy lending bubble years of 2001-2007.

Fair enough, you do now need a decent size deposit/low LTV to get the deals but that's because there's a property crash on.

Gorgeous_George

!!!!!!? wrote: »

Mortgages are actually remarkably cheap when compared to the medium term.

They're only expensive when compared to the crazy lending bubble years of 2001-2007.

Fair enough, you do now need a decent size deposit/low LTV to get the deals but that's because there's a property crash on.

Mortgage rates are low compared to the average over 25 years in the PAST but who knows how they compare to the next 25 years?

If we get another high interest rate policy, make the rich richer Tory Government then I'm sure we will return to double-digit interest rates. If we don't, then the average for the western world may well be 3 - 4%.

5% may not seem low over the next 25 years.

Even when interest rates were 10% we had MIRAS making the effiective rate less than 7% for many.

GG

Guy_Montag

Dan: wrote: »

Are you sure dop? Banks are now slowly starting to compete with each other for business again and slowly reducing mortgage rates.

Before you jump down my throat im not saying that this means everything will turn around and prices will start rising. Mortgages are still expensive, esp for high LTV.

Are you sure banks are competing for business? Last time I looked the CML figures were at an all time low.

WTF?_2

Gorgeous_George wrote: »

Mortgage rates are low compared to the average over 25 years in the PAST but who knows how they compare to the next 25 years?

If we get another high interest rate policy, make the rich richer Tory Government then I'm sure we will return to double-digit interest rates. If we don't, then the average for the western world may well be 3 - 4%.

5% may not seem low over the next 25 years.

Even when interest rates were 10% we had MIRAS making the effiective rate less than 7% for many.

GG

Central Banks don't set high or low interest rates for some internal political reason (well, they shouldn't anyway). They set interest rates high to deal with inflation, they set them low to boost the economy by freeing up money.

IMO the only reason they could have been as low as they have since 2001 was that the emergence of China let the authorities keep IRs low because ever-cheaper consumer goods from there offset the rising cost of a lot of other stuff. That was a one-off factor which is now reversing as it looks like Chinese made stuff will get more expensive.

Within the next 25 years we will surely see at least one period of strong inflation which will have to be curbed with high interest rates.

It's not like we have entered a new economic paradigm or something. Looking at the levels of rates for the last 25 years is a perfectly valid starting point when guessing how they will average over the next 25.

formulaonefan

There are lots of people who want to buy (including myself) BUT

1. Can they afford to buy?
2. Are the banks willing to lend?
3. Have they got enough deposit?
4. Economy is heading for recession and there are risks all around us of job losses

There are lots of factors involved. The OP of this forum is predicting BOE putting down the interest rate is going to flog loads of people to buy property. BUT interest rate alone is not enough I'm afraid.

Before the crunch we had:

1. Low Interest rate
2. Banks were leading people 6-8 times salary to almost everyone.
3. Economy was strong.
4. People didn't need a deposit. There were 100% and 125% deals.

Non of them now exists I'm afraid. We need all that to see a house price boom once again and that's not going to happen any time soon. So people don't have to worry about missing the boat etc.

When interest rate goes down sellers are going to get confident and not accept low offers but they are not going to sell either.

Each and everyone have their own way and want to justify what they are doing and try to console themselves. That's human.

I will do what is right for me and I'm the one who will have to live with it. Rather then being bear and bulls, can we use these forums for information exchange and try to help each other out! Its just getting silly with some people being so rude and can't accept whatever decision they have made didn't work and they are trying to take it out on others here in the forum.

lynzpower

Ive been following your investments conrad and generally they seem to be well thought out ( possibly aside from that Algeria borders one)

I thought you were looking at Colchester, out of interest what was the reason you discounted that?

Can I ask where abouts this house is, I have been very interested in what youve seen, and I think you find better properties at better prices than I do

Microstar_2

Investment rule number one "buy when no one else is"

Hmm. Sometimes no one is buying because its simply not a good investment.
My feeling is that we are still on a fairly steep downward slope. The golden rule for me if I were buying (which I'm definitely not at the moment) would be, is the yield sensible? If you can make the figures work (I would want at the very least 8%) then go for it.

WTF?_2

chucky wrote: »

and you're forgetting low or high interest rates will also have an effect on exchange rates with other currencies not just purely inflation so Central Banks have a responsibility there too (no comments on how bad they're doing it either trying to go off topic please) - it's a bigger picture !!!!!! and as you knowthe problem is international rather than exclusive to just the UK.

why is it when you put your arguments forward you conveniently forget other important factors that you should mention that put it in a better perspective?

Inflation/Deflation and Exchange rates are two sides of the same coin.

If your currency is inflating, chances are that the exchange rate is dropping as it becomes worth less than before.

Likewise, if your exchange rate drops then it pushes inflation up as imported goods cost more.

The pound has been dropping considerably against pretty much everything except the dollar (until the last couple of weeks when it plunged against the dollar too ) which tells me that there is some nasty inflation going on of Sterling.

My non-sterling savings appreciated damn near 25% in value over the course of the last year. Not from interest payments, just because Sterling devalued so much - that's the real world effect of inflation for you.

ad9898_3

Dan: wrote: »

Are you sure dop? Banks are now slowly starting to compete with each other for business again and slowly reducing mortgage rates.

Before you jump down my throat im not saying that this means everything will turn around and prices will start rising. Mortgages are still expensive, esp for high LTV.

You're right, they are starting to compete, unfortunately for any bulls out their they are only competing for the "safe business" i.e at least 25% LTV, which is of no use to 95% of FTB's, hence the market is only going one way.