Get ready for rates to rocket

Graham_Devon

duck wrote: »

The Recession has reached its lower limit therefor banks have and will remove the lower interest rates and deals for home buyers.

Everything is improving, and about time....

Since when did a recession have a lower limit!?!?

ad9898_3

duck wrote: »

It is the first time both indexes have risen together since August 2007.

duck wrote: »

And they will do again in the future, but in between there will be many months of falls, that's how house price crashes work, didn't ya know.;)

StevieJ

ad9898 wrote: »

Smart money doesn't goto the bookies at all.

It did yesterday in the Derby :beer:

confused31_2

The best trackers at the moment are the base rate plus 2.5%, with a big fee, now its okay when its 2.5% against 0.5%, but when the rates go back up and i can easily seee them going to 5 or 6%, its different ball game and these people will be paying 7.5% to 8.5%.

Now if some takes the deal +2.50 now when the boe rate is 0.5% on a 100,000 pound mortgage they will have to pay 473 pound repayment or 249 pound interest only.

If the boe rate go up to 5% on the same deal for 100,000 pound mortgage the payments will go to 738 pound repayment and 625 pound interst only.

If the rates go up to 6% on the same deal for a 100,000 pound mortgage the payments will go up to 805 pound repayment and 708 interest only.

Now that is on the best deal at the moment, you would have to be a mug to go on a tracker +2.5%. and i think to get the deal you need 75%:eek:

pizzagirl

duck wrote: »

Everything is improving, and about time....

You mean like the unemployment figures duckie? :rolleyes:

Thrugelmir

Graham_Devon wrote: »

Shows they are scared shyteless if you ask me. Why would they be pulling deals if they thought they could make money from them?

They are so scared of loaning at 90%, because of the prospect of the housing stock depriciating, that they are no longer prepared to offer the loans and up their risk.

Fixed rate deals are pulled as only so much money is allocated to each issue. The money lent has to be backed by the same amount deposited for the fixed period. The bank making its profit from the margin.

julieq

ad9898 wrote: »

Smart money doesn't goto the bookies at all.

Actually it does. There are plenty of people making very good livings out of gambling, it's really just a question of being able to assess risk in a narrow domain better than a bookmaker and manage liabilities.

The each way thing is interesting though, it's an old and well known dodge for boosting value on a racing gamble. An each way bet is two bets, one to win, one to place, there's a fixed formula to derive the place odds based on the win odds, and that imposes a structural weakness as the bookie is sometimes forced to lay odds greater than the probability of the outcome. If a horse is highly likely to win, it's possibly disproportionately likely to place.

You take a flat race with a short price odds on favourite with second and third favourites odds against and back the favourite each way. For this to work the race has to have as close to 8 runners as possible, but at least 8 runners.

Because these favourites are difficult to keep out of the places in flat races, you are effectively boosting the odds of the win above the probability of it happening which is the condition for value in a bet. Bookmakers hate to take these bets, and people taking them on are known as each way thieves (if not worse). Many will refuse to take the bets or reduce what can be bet on them to a bare minimum.

There's a variant which involves backing the 2nd and 3rd favourites each way in similar races on the basis that there is value in the place part of the bet. One of the 2nd or 3rd favourites (or both) is highly likely to place, but the place part of the bet will be odds against quite often.

Not that my £2 bets at the track are particularly smart (I backed a succession of 2nd favourites which came, err, second ) or likely to do anything other than buy my children ice creams, but it's a good way to learn about risk, and also a good day out. And you can pay the entrance price with Tescos vouchers

thor

dopester wrote: »

Inflationary because of energy costs? :rotfl:

Energy costs are going to crash right back down and further still.

We're hostage to supply by cartels or other reluctant suppliers.. if they hate the thought of selling below what they want for their energy... but increasingly we can't afford old-world prices.

It's about supply and demand. Demand is falling but supply will fall even quicker. Year by year it is getting harder to extract oil and gas due to the fact that these resources are finite. E.G. North Sea Gas is virtually gone.
What we need is a real initiative to massively increase renewables. Wind Turbines dotted all over the landscape would be a good start. With Tidal, Solar and Bio energy just think how much work this would provide for our manufacturing sector. It won't replace conventional energy entirely but combined efficiency measures this is what I would prefer the Government spending taxpayers money on.

Snooze

duck wrote: »

The Recession has reached its lower limit therefor banks have and will remove the lower interest rates and deals for home buyers.
Quote :
Halifax, Britain’s biggest provider, said last week that house prices rose +2.6% in May to an average £158,565 — their fastest rate for seven years. Nationwide’s index had prices up +1.2% in the same month.
It is the first time both indexes have risen together since August 2007.
The housing market as well as the stock market are on there way up.

Everything is improving, and about time....

:rotfl:

Who left the sock drawer open???????!!!!!!!!!

:rotfl::rotfl::rotfl:

Rob

treliac

dopester wrote: »

You are an excellent STR candidate, even now, but I won't push it.

Thanks dopester for your suggestion. However, why on earth should I want to do that? Lose my sanctuary, the home I've spent years working on - to make it properly habitable and to my taste ... and even then there's still more to do.

Even if I did want to do as you suggest, there's still very great risk attached to that. How does anyone know by how much prices are going to come down (we can only guess). Renting would eat away at profit from the sale. I would have given up somewhere I love and might never find anything I am equally happy with, especially given potential for job insecurity and finances in general. It's a no brainer. Plus all our hard work would have gone down the drain. Who wants cash in comparison to what we already have?

We've done most of the work ourselves. Budget is quite tight (not helped by original mis-sold mortgage) but DH is very practical and will find out how to do most of what he doesn't already know about. I'm pretty handy with a paintbrush . However, things like the rotted exterior woodwork and broken windows were done by professionals but only when we could afford to have them done.

There are no antiques in our house (except me, maybe ) and furniture has gradually been purchased to be modern, functional and at carefully researched prices. Overall, the effect we have created is modern, fresh and comfortable. I hope to enjoy it for a few years yet!

It's good of you to help out your family if you can. Families should work together. :cool:

Are you saving everything under the sun to buy a house with the hope that it will raise a profit that you can convert into cash in due course? If so, you may well change your mind one day and learn that owning a home can be about something much more than that. I hope so.