BOE Base = 2%

Cannon_Fodder

Dithering_Dad wrote: »

These sums really only work out if you sell your house at peak. If someone STR'd in 2002 (as some HPC members did), then they're still going to be waiting at least another 18 months before prices even drop back that far. I saw on the BBC that prices were down to 2006 figures currently.

Imagine having to wait for 7.5 years for an investment to just get back to where you where you started from.

Meanwhile, the STRer would have to store their money somewhere. If they invested in the stock market, then they would have lost more money than if they had kept their house, if they put it in savings then they would now be losing out due to inflation being greater than their savings interest.

PN is missing out even more because she is living off her interest and so her STR pot is being eroded completely by inflation. She is also losing out on state benefits because she has such a large STR pot, compounding her losses.

PN needs to do some calculations to see whether she is better off continuing to have her STR pot eroded, or whether she should take advantage of the already large house price falls and buy herself a nice 2 bedder. I suspect with her STR pot she would be close to being able to buy a house outright and then would qualify for state assistance and perhaps be much better off than she is now living off beans and toast in her rented accomodation.

Actually, some of the other HPC people really need to start doing these calculations too. If you have a large deposit, coupled with low mortgages perhaps you'll save money by paying less mortgage than you currently are in rent. You can then start overpaying your mortgages instead of putting your monthly savings in a crappy bank account paying a pittance.

Quite right.

Some lucky people fixed at 7% in the summer.

purch

Actually, some of the other HPC people really need to start doing these calculations too

Do you think anyone has the time to do that ???

Most are way too busy posting incoherant opinions on here to do any calculating

Dithering_Dad

purch wrote: »

Do you think anyone has the time to do that ???

Most are way too busy posting incoherant opinions on here to do any calculating

I think they do a lot of calculations but only factor in the %age falls in house prices and not all the other factors like the stamp duty holiday, lower VAT, lower mortgage rates that can be fixed for 5 years (surely we will be out of this mess by then?), builders/decorators/plumbers who are desperate for work (even new builds need work to get them to your taste, a 'do-er upper' would obviously really benefit from cheap tradesmen), putting savings onto the mortgage instead of into crap accounts, etc. etc.

If a FTB can buy a house now that has already been discounted by 20% and then knock the seller down by a futher 10% or 15%, they will have 30 - 35% discount from peak. Perhaps prices could fall by 50% as some maintain, but that could be 3 years hence. Meanwhile, they could have been living in their nice home for those 3 years, had it renovated on the cheap and have paid down the mortgage a bit.

Some of the HPC people are so fixated about screwing down sellers to the last penny, they don't seem to see the bigger picture.

Just offering alternatives, please HPC people, don't kill the messenger

Cannon_Fodder

Just received an email from ICICI, basically touting for savings business, but appropriate to today's news;




[FONT=Zurich BT,Arial, Helvetica, sans-serif][FONT=Zurich BT,Arial, Helvetica, sans-serif]"We would like to share some facts* on savings in United Kingdom today:[/FONT][/FONT]

<LI class=style2>

Over half of all working people (52%) would not have sufficient savings to support their families were they to find themselves out of work.

[*]Close to 70% of us needed a cash in the last ten years to cover an unforeseen expense.
A good way to address these concerns is to put a savings plan in place. "



I do hope they have Mr Brown on their books, so they can remind him that prudence has its place.

SGE1

formulaonefan wrote: »

they have done it again! interest rate at 2% but mortgages aren't coming down! what a waste!!!

We don't know that yet...

Dithering_Dad

Cannon_Fodder wrote: »

Quite right.

Some lucky people fixed at 7% in the summer.

There are always some people who make the wrong decision financially. Who knows, if we get the hyper inflation touted by !!!!!!, 7% might seem like heaven

What about the rest of my post - you quoted 20 lines of it and just give this small retort. Are we to believe that you agree 99% with my analysis?

StevieJ

Cannon_Fodder wrote: »

Just received an email from ICICI, basically touting for savings business, but appropriate to today's news;




[FONT=Zurich BT,Arial, Helvetica, sans-serif][FONT=Zurich BT,Arial, Helvetica, sans-serif]"We would like to share some facts* on savings in United Kingdom today:[/FONT][/FONT]

1. <LI class=style2>Over half of all working people (52%) would not have sufficient savings to support their families were they to find themselves out of work.
2. Close to 70% of us needed a cash in the last ten years to cover an unforeseen expense.

A good way to address these concerns is to put a savings plan in place. "



I do hope they have Mr Brown on their books, so they can remind him that prudence has its place.

1. Close to 70% of us needed a cash in the last ten years

Watch out for those phishing emails, they tend to contain errors

Cannon_Fodder

Dithering_Dad wrote: »

There are always some people who make the wrong decision financially. Who knows, if we get the hyper inflation touted by !!!!!!, 7% might seem like heaven

What about the rest of my post - you quoted 20 lines of it and just give this small retort. Are we to believe that you agree 99% with my analysis?

Yes.

That's why my "small retort" was preceeded by "quite right".

I thought that would signify agreement on its own.

I am happy to confirm, in the absence of clarity, that I do agee with you.

I know this must come as a shock....!


I believe I mentioned last week the need for people not to be bound by dogma or timescales, but to act when it suits them, in a manner which is affordable and if compromised in some way, at least compromised in a way they are happy to live with.



On a similar, but unrelated vein, did anyone see Harriet Harman failing to answer a straight question for 5 minutes, on Newsnight last night.

Damn woman (your pardon, ladies).

StevieJ

Cannon_Fodder wrote: »

http://www.bankofengland.co.uk/statistics/rates/baserate.pdf

1694 was 6%...

We fought the Napoleonic Wars at 5% it appears.

Wonder what crisis occured in 1844 for 2.5% to be reached?


Someone else can turn the figures into a graph.

Or 1852, 2%, the year before the Crimean war !

Cannon_Fodder

StevieJ wrote: »

Or 1852, 2%, the year before the Crimean war !

Or July 1862...(effect of American Civil War?)