Get ready for rates to rocket

Heyman_2

Fella wrote: »

Although to be honest, this is more analysis than is necessary. IRs are ultra-low for the simple reason that Brown desperately needs them to be so - it's his last-gasp attempt to prevent the housing bubble deflating completely before election day - & taking his few remaining voters with it.

Once the election has been held that reason will no longer exist.

Can you please then explain why the US has rates lower than us at the moment and the Eurozone rates are only marginally higher?

You can't really pin either of those on Brown as well can you?

Fella

Heyman wrote: »

Can you please then explain why the US has rates lower than us at the moment and the Eurozone rates are only marginally higher?

You can't really pin either of those on Brown as well can you?

Why not, Brown blames ALL of the UK's woes on the US?

Ah, I guess it's OK that way round is it? Lol.


You can believe what you want Heyman. If you seriously think IRs will be 0.5% in a year or two then good luck to you. Personally I'll be basing my actions on entirely different assumptions.

dopester

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.

In answer to that part - no. Not interested in any profit. Just interested in not paying bubble insane price for a home.

At the moment property is priced at crazy bubble highs - values ramped up by those at the margin having paid ever higher prices through easy credit over the years... and the paradigm supply and demand and a host of other shallow arguments which won't hold true for supporting values.

Also entering recession/depression/paradigm values collapse... property values now more insane than ever, even with -20% from peak... greater than the peak ever seemed even to me... for those in university, those now studying for the GCSEs... and the dire prospects and much tougher opportunities for so many of them.

"!!!!!! did you think you were doing from 1997, you greedy, self-indulgent, idiots?", I hear them ask in the coming time.

"Tell you what.. how about we become slaves and worship you, pay off the debts and make sure you have your rightful pensions, and be in awe at the period where you so richly deserved house prices trebling in 10 years?"

Totally agree with what you are saying about homes, except I'm not hoping to buy low and then hope my home will go up in value. That is the last thing I'd want.

Valued at sustainable levels where the economy is not so dependent on property and less likely to collapse because of a bubble/lending/borrowing to fuel ever higher, dangerous price levels. You have a home yes - but it is valued at bubble price - and depending where you have your home.. some areas may suffer from lack of opportunities.

Heyman_2

Fella wrote: »

Why not, Brown blames ALL of the UK's woes on the US?

Ah, I guess it's OK that way round is it? Lol.


You can believe what you want Heyman. If you seriously think IRs will be 0.5% in a year or two then good luck to you. Personally I'll be basing my actions on entirely different assumptions.

I note you avoided my question by generalising. I'm not a Brown apologiser or even a Labour supporter, by the way.

Specifically about interest rates - IF Brown is keeping rates at 0.5% for purely selfish reasons then why are they low in the EU (1%) and the US (essentially 0%) as well?

dopester

treliac wrote: »

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.

As for all your other points.. I totally understand. If you aren't bothered about loss of values for your home, then it makes sense to stay.

I'd still like to recommend you STR-ing and totally breaking from what is your comfort-zone and expectations - but that is a bit of an ask from where you are now, what you are used to - as not having your own nice home but slumming it could be difficult... and like you say, significant risk is still involved, even in cash.

tomstickland

It'll probably rise just fast enough to be at a peak when my fixed rate ends.

treliac

dopester wrote: »

Totally agree with what you are saying about homes, except I'm not hoping to buy low and then hope my home will go up in value. That is the last thing I'd want.

Then you see, dear dopester, we are of one mind. We both want to be able to have and enjoy homes we have worked hard to achieve. I have already got there, though when I was your age I, too, had to rely on hitting the market at the right time. We didn't choose to buy a house needing lots of work, but had to make the best decision with the funds available.

And I don't want bubble prices either. Meaningless to me as my house is a home not a commodity. If/when I want to sell, it will be at a price relative to what I am looking at buying, so the value is no big deal to me.

As I've said before, I would like prices to drop. Previous salary multiples were more sensible and I want my children to stand a chance in the market.

I and others in my position are not responsible for what has happened in the economy and with HPI and I can't believe that many could have had that in mind when they bought. So any wrath you may feel should not be directed at us. We are all vulnerable to forces well beyond our control.

Good luck in reaching your goal. It sounds as if you will be mortgage free, or almost, from the outset. :beer:

P.S. I need my comfort zone - I have a demanding career and need the refuge I've worked for. The rest of my family needs it's security too! You don't need me to STR (as if I would when I've striven to achieve my own home!). We'll have to meet up one day so I can truly try to understand why you would want to put me out of my home.

Fella

Heyman wrote: »

I note you avoided my question by generalising. I'm not a Brown apologiser or even a Labour supporter, by the way.

Specifically about interest rates - IF Brown is keeping rates at 0.5% for purely selfish reasons then why are they low in the EU (1%) and the US (essentially 0%) as well?

Heyman - I have no idea. I don't follow the EU or the US economies to any degree so I can't comment meaningfully on them.

Brown on the other hand, I have witnessed first-hand do everything he can to keep IRs artificially low in order to maintain the housing/consumer spending bubble. His biggest sin by far being to remove house prices from the CPI. Had he not done that the MPC would have had to raise IRs long ago to counter inflation & the UK economy would not have been wrecked by the disastrous bubble in house prices. In other words the system would have worked more or less as it was intended to. Instead house prices were allowed to boom to ridiculous levels.

All Brown knows how to do is spend & encourage others to spend. It's what got us in this trouble & it's what he is proposing to get us out of trouble (since when has there ever been a problem to which the solution is more of whatever caused the problem?)

But I digress. Within a year we will have an election. If IRs are still 0.5% a year after that I'll happily come back here & post that I was wrong.

lostinrates

Just like to say I've been thinking about dopesters stance over night and it occured to me that while the idea of the two highlighted cases STR seems nuts to me I drew parallel to the person I know living over their budget on benefits, who rents, but has a house full of beautiful antiques. I suggested the clue to there freedom from debt (and more) lay in the furniture and the answer from the party, and others, was ''Oh no, wh should they have to sell those, thats all they have''. If its all you have, you have it, and if you have it you have something: by definition, and so, in this sort of case, when its back against a wall on handouts or freedom, I can see a house is not so different to the ntiques. I'm not sying I think that applies to Max or Treliac in the least: but viewing it this way made me sort of reach agreement with dopester for SOME people.

Really2

confused31 wrote: »

interest rates do not go up in the boom time, when we was in a recession in the 1990's rates were nearly 15%:eek:

That recession was caused by high inflation, that caused high interest reates, which in turn casued a recession. (17% IR end of 1979 just over a year before the start of the recession, 9% Nov 1982 the official end of the recession.)

Also was their not somthing about the ERM?

Anyway rates rearly get increased through a recession and if they do not by XX% espetialy when inflation is so low.

How many of the biggest countrys have increased their IR during this recession?