what will the interest rate cut do to house prices?

domcastro

So, good time for mortgages, bad time for savers. But will this cut have an effect on house prices? It didn't in USA - what do people think? Will everyone be rushing out to buy houses again?

mr.broderick

domcastro wrote: »

So, good time for mortgages, bad time for savers. But will this cut have an effect on house prices? It didn't in USA - what do people think? Will everyone be rushing out to buy houses again?

Probably we are all thick enough.

Cannon_Fodder

No effect whatsoever.

withabix

To the OP: No, the economy is hurtling into a deep recession.

Indicators are pointing to the worst economic conditions for 100 years accoridng to some chappy on R4 at lunchtime.

3% Base Rate is the lowest for 55 years for a start...

House prices have probably still got 25% to go down yet. Unfortunately/Fortunately, depending on how you look at it...

Following my divorce 6 years ago, I started again with 5% deposit (£2500) and a £50,000 mortgage on a house that is (was :rolleyes: ) now worth £150,000, so I'm relatively OK unless we see a 60%+ fall...could happen though.

chucky

probably nothing - prices will flatten at out at some point next year regardless.

interest rate cuts will have more effect on othe economic indicators and probably make it a shallow instead of a deep recession.

Really2

Nothing,

You may see less reposessions because of the rate cut but that will be it. (due to lower mortgage costs and cheaper business costs, less job cuts)

Expect to see mortgages overpaid to claw back some of the equity lost over the last year.

dopester

House Price Annihilation.

Really2

dopester wrote: »

House Price Annihilation.

I have not seen that website yet.;)

luvpump

Not a lot, the recession is cast in stone now, it will be long & Hard, all the rate cuts in the world wont help you if you havn't got a job, Imported goods will become more expensive too.. The Property Market is driven to a large extent by FTB's & thoes moving up the Ladder, NEW mortage deals are a LOT more expensive, although existing tracker mortgages will reap the benefits..

Conrad

A common sense view would indicate more buyers will be attracted to buying as we go into next year.

I can envisage end user rates of around 4.5% soon, which should mean its cheaper than renting.
The general sentiment of a landscape of falling prices will deter some, but not deter others. Those detterred are those inclined to fear of ticket loss (money loss).
A goodly proportion of folk are not hung up on ticket loss to the extent it would deter a purchase when rates are this low. An analogy would be in any crowd out to dinner you get the majority that just split the bill, but sometimes one or two that dont make a full contribution on the basis they didnt have wine or something - you know the types


Thier resoning would look something like;

RENTING = LACK OF CONTROL OVER PHYSICAL LIVING ENVIROMENT AND FUTURE PLANNING

OWNING = GREATER CONTROL OF PHYSICAL LIVING ENVIROMENT AND FUTURE PLANNING (not at behest of lanldord)


Not a return to boom yet as 10% deposits needed and tight lending criteria.

carolt

Conrad, do you really see rates of 4.5% for FTB's without giant deposits? Soon?

Really?

Just interested.