what will the interest rate cut do to house prices?

StevieJ

withabix wrote: »

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.

Unbelievable you growl like a bear, but insist your house has tripled in value in six years (even after 12 months of falls) honest Gov everyones house has fallen apart from mine. Just fed figuers into Nationwide calculator for the uk and it comes up with a figure of 74,801.

StevieJ

Conrad wrote: »

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.

Maybe a once in a lifetime chance of fixing on a long term low rate.

ad9898_3

Oh the media ramping are going to have a field day with this one, however I don't think it will make a great deal of difference, will it get a few people to step into the market ?, probably, but the average house just took a £3500 hit this month (Halifax figures of 2.2%).

If you took a 200k mortgage out today (supposing that the whole 1.5% cut was passed on today, which of course it won't) you would save a whopping £175 per month.

As a FTB, I would sooner take the £3500 off a house per month than £175 off a mortgage.

I'm a little pi55ed my savings are going to take a hit but on the other hand in 2-3 years time there will be another 20% off house prices and I maybe be able to get a 3% fixed rate mortgage. Swings and roundabouts

mr.broderick

ad9898 wrote: »

Oh the media ramping are going to have a field day with this one, however I don't think it will make a great deal of difference, will it get a few people to step into the market ?, probably, but the average house just took a £3500 hit this month (Halifax figures of 2.2%).

If you took a 200k mortgage out today (supposing that the whole 1.5% cut was passed on today, which of course it won't) you would save a whopping £175 per month.

As a FTB, I would sooner take the £3500 off a house per month than £175 off a mortgage.

I'm a little pi55ed my savings are going to take a hit but on the other hand in 2-3 years time there will be another 20% off house prices and I maybe be able to get a 3% fixed rate mortgage. Swings and roundabouts

Disagree the media have been negative to say the least.
Best to put any money you have saved in to a house now and maybe borrow the rest at an ultra low rate. Pointless having savings now, get the money spent.

ad9898_3

mr.broderick wrote: »

Disagree the media have been negative to say the least.
Best to put any money you have saved in to a house now and maybe borrow the rest at an ultra low rate. Pointless having savings now, get the money spent.

Can you point me to any 'ultra low rates' ?, there aren't any.

Even if you could get a mortgage deal for 1%, why would you on a falling asset ?, pointless to be honest.

StevieJ

ad9898 wrote: »

Can you point me to any 'ultra low rates' ?, there aren't any.

Even if you could get a mortgage deal for 1%, why would you on a falling asset ?, pointless to be honest.

Because if people could get interest rates of 1% it wouldn't be a depreciating asset.

mr.broderick

ad9898 wrote: »

Can you point me to any 'ultra low rates' ?, there aren't any.

Even if you could get a mortgage deal for 1%, why would you on a falling asset ?, pointless to be honest.

Anger, denial acceptance?

Really2

ad9898 wrote: »

Can you point me to any 'ultra low rates' ?, there aren't any.

Even if you could get a mortgage deal for 1%, why would you on a falling asset ?, pointless to be honest.

Even at todays rate and withouth a deposit the house I purchased would be

£250,000 no deposit. (.49 baserate tracker)(ps got £90K off the house equiverlent to arroun 02-03 price)
£727 per month IO Mortgage
£1200 to rent

£473 better off.
But i put down 30% so I am £700 better off.

That is capital I can repay and i am not planing on moving for years if at all!

dopester

We're still at the top part of a deflationary vortex.

There isn't any point spending your money when the purchasing value of your money is actually rising, especially in relation to house prices which are set to crash hard.

And, if you have to spend, there will be opportunity galore to pick up liquidated and distressed stuff cheaply.

darktrader

mr.broderick wrote: »

...Pointless having savings now, get the money spent.

Isn't that the attitude that got us here in the first place?

Granted, saving is less attractive, but I would still rather have £10K in savings with low interest rate and Inflation reducing its buying power than have £10K of debt.