BOE Rates hit 1.5%

Nomad25 · 8 January 2009 at 4:55PM

The economic policy wants you spending not saving.

I'm with Old Slaphead on this one, I'm sick of seeing my savings being screwed.

If the financial investments that we so called 'prudent' wrinklies have made from hard earned cash, continue to lose value as over the past year, we'll not be spending the little that's left, that's for sure.

Or, I suppose we could blow it all now and instead of being mainly self-funding in our near retirement, rely on the state to support us.

Under the mattress banking is becoming more attractive by the day, even if it's not inflation proofed, it won't be subject to tax!

WTF?_2 · 8 January 2009 at 4:59PM

chucky wrote: »

you sticking up for Carol all the time is getting quite creepy now... please stop...

Hacienda Riquelme sold 2006, before it was even built... flipped...

by the way !!!!!! I thought that in your ivory tower you never made things personal or attacked anyone personally... well you just have... oooops

Actually Chucky, I have you on ignore and don't slag people off personally because it was ending up in tedious flame wars (wrecking the group too) and I came here to talk about house prices and the economy.

However, there's no rule that says I always have to stick to that and having seen Carol's reply I thought I might indulge myself and point out a few obvious flaws in your attempt to inform the world about how clever you are.....

Your desired image as successful property investor doesn't really tag up with the posts you made about your Polaris World misadventure here on MSE (long since deleted by you, of course).

Just one of quite a few things that don't add up about you. I'm starting to believe that you actually might just be sad, mad Bruno as a few people have (half jokingly?) remarked from time to time.

carolt · 8 January 2009 at 4:59PM

speedbird1973 wrote: »

You may not have missed the boat - you HAVE missed the point however. I have a nice HOME, security, I can knock a wall down, redecorate do as I please in my property (well within reason!). It's not all about the investment, which will recover. One day. I invested £10k in a deposit on a flat 8 years ago. If I sold up and with a bit of luck by £10k is now £70k - and I have a home. Poor lil ole me!

You're also no closer to getting a mortgage Carolt - fewer and fewer people will lend you any money to buy a super cheap house! You started with nothing you still have nothing and for the next few years you'll still have nothing - ergo you are nothing!

No - just prodded my leg. Still there. Haven't disappeared yet.

So does that mean all people who rent don't exist in your world? Did you not exist till you bought a place?

Wow.

What a fantastically interesting world view. Far less populated. Lucky old you.

Kenny4315 · 8 January 2009 at 5:02PM

!!!!!!? wrote: »

The real problem is the longer term effect of the low rates now. Once they shoot back up it's going to hammer people who are just about able to make ends meet at the current panic levels because they quite simply borrowed too much.

No, the real problem is how to avoid the dynamic duo 'Mr Clown and Hs Darling' getting their grumby mits on my recent profit windfall, and spending it on SH*TE. :mad:

WTF?_2 · 8 January 2009 at 5:03PM

Nomad25 wrote: »

I'm with Old Slaphead on this one, I'm sick of seeing my savings being screwed.

If the financial investments that we so called 'prudent' wrinklies have made from hard earned cash, continue to lose value as over the past year, we'll not be spending the little that's left, that's for sure.

Or, I suppose we could blow it all now and instead of being mainly self-funding in our near retirement, rely on the state to support us.

Under the mattress banking is becoming more attractive by the day, even if it's not inflation proofed, it won't be subject to tax!

As long as there really is general price deflation and asset classes are falling, then 'under the mattress' might not be such a bad idea. You don't need interest in such an environment and anything else you can invest in right now is very risky.

Personally, as long as house prices are falling it doesn't really matter if I get zero interest on my savings, as that's what they are going to be used to buy.

And silly rates mean that should I decide to take on debt to buy a house I can get it stupidly cheaply (the entire country will be paying the price for this government policy so I might as well get my own pound of flesh out of it).

speedbird1973 · 8 January 2009 at 5:03PM

!!!!!!? wrote: »

So you bought in 2000 when prices were sensible, before the crazy HPI boom, and eight years later your property is worth more? Not exactly a shock there. Unfortunately, not everyone was in a position in their life where they were going to want to or be able to buy in 2000 or earlier.

You might want to spare some thought for the people suckered into buying in the later stages of the boom, especially those who bought in 2007.

Prices started to diverge from common sense around 2003 and it looks like they could well end up back there.

With mass unemployment threatening that means a lot of people in a very sticky financial situation. A large number of people face ruination for buying a house at the wrong time (not in 2000 when it was lucky for you) because of the greedy rush into property, fuelled by dodgy credit which is now unwinding to disastrous effect.

Sorry !!!!!! I went of at a bit of a tangent. The point I was initially trying to make is I (and everyone in 2007) have a HOME. People need to realise they have a roof over their heads and place to call their own. If they bought to make money, well like all investments the value can go up as well as down - no sympathy. You're gambling. You lost, tough.

For those that are in negative equity in their HOME it's not an issue unless they're forced to move. I agree the job market is scary at the moment (looks over his shoulder for the boss!). However when interest rates were higher I'd suggest that the threat of coming off a fixed rate onto a variable one and leaving people unable to make ends meet was a more serious issue than the employment one now. I think on balance the pressures are different, but less than before.

WTF?_2 · 8 January 2009 at 5:11PM

Nomad25 wrote: »

If the financial investments that we so called 'prudent' wrinklies have made from hard earned cash, continue to lose value as over the past year, we'll not be spending the little that's left, that's for sure.

Pretty much all asset classes are falling right now, or at least very unstable with a tendancy towards the downside, except gold and some foreign currencies - which are inherently risky anyway.

So near zero yield on cash is not actually a bad deal. That's a major reason why the demand for short term government bonds is so great.

Under the mattress banking is becoming more attractive by the day, even if it's not inflation proofed, it won't be subject to tax!

An important upside of physical cash is that it can never be wiped out, unlike money in a bank which really just represents a debt by the bank to you.

(Obviously this assumes you don't have it nicked, or get burned, or have the dog eat it)

WTF?_2 · 8 January 2009 at 5:19PM

speedbird1973 wrote: »

Sorry !!!!!! I went of at a bit of a tangent. The point I was initially trying to make is I (and everyone in 2007) have a HOME. People need to realise they have a roof over their heads and place to call their own. If they bought to make money, well like all investments the value can go up as well as down - no sympathy. You're gambling. You lost, tough. .

Regardless, most FTBs who bought in recent times near peak prices are in a very precarious financial postion now. And yes, even though there was a lot of speculation about a lot of people bought because they wanted a home and were assured by peer pressure that housing was a sure thing and that they should go ahead and borrow an eye-wateringly large amount of cash.

For those that are in negative equity in their HOME it's not an issue unless they're forced to move. I agree the job market is scary at the moment (looks over his shoulder for the boss!). However when interest rates were higher I'd suggest that the threat of coming off a fixed rate onto a variable one and leaving people unable to make ends meet was a more serious issue than the employment one now. I think on balance the pressures are different, but less than before.

It very much is an issue for some people already: check out this thread from the house buying, renting and selling group:

http://forums.moneysavingexpert.com/showthread.html?t=1392017

You got lucky when you bought your home - prices continued on an upward trend for seven years afterwards. So it all turned out roses for you thanks to sheer good fortune - but not so for others whose crime was to buy a home during a bubble created by cheap money and rampant speculation.

Thats why so many of us here spoke out against buying, earning 'doom monger' tags from some who jeered that anyone not buying was bitter at missing the boat of ever rising prices.