Get ready for rates to rocket

mewbie_2

lostinrates wrote: »

mewbie, reading my posts back this morning, I think you might rather need to return the favour. I notice I read more ''animated'' than I am this morning. Its not like me to use the word ''rubbish'' is it? Oh well.....too much coffee this morning I guess.

Hi LIR, not with you, what favour, read what? Have I missed something, or strayed too much from my pleasant but harmless idiot identity?

ad9898_3

julieq wrote: »

Are they going down forever dopester? Is this some sort of "new paradigm"?

In 10 years, prices will be higher than now and anyone with a house will be 10 years closer to owning outright. And they will have had 10 years living in a house. That seems ok to me.

It's not a certainty that house prices will be higher than now in 10 years(in fact they probably won't), and as far as 10 years closer to owning, quite a few people on here will have owned outright for 7 years or more by then, by saving for another 2-3 years while the bubble continues to deflate and buying when their savings have been maximised.

Heyman_2

julieq wrote: »

In 10 years, prices will be higher than now and anyone with a house will be 10 years closer to owning outright. And they will have had 10 years living in a house. That seems ok to me.

Seems ok to me too, although the important detail is that a) if interest rates do rise to levels seen in the 80's (i.e. approaching or at double figures) then people may not be able to ride out the storm because of the amount they've borrowed and b) negative equity meaning that it will be difficult to remortgage over those 10 years.

A literal example -

Currently, I'm paying 1.29% on a Lifetime Tracker, my monthly payment is around £700ish a month.

If interest rates go up to say, 9%, my tracker would be at 10.29% and my payments will more than double to around £1700 a month.

I would hope to have remortgaged long before then onto a better deal but negative equity will play its part for us, which may make that difficult.

lostinrates

mewbie wrote: »

Hi LIR, not with you, what favour, read what? Have I missed something, or strayed too much from my pleasant but harmless idiot identity?

n'ah...I think people might think I need talking down this morning, thats all.;)

julieq

Ah well, you're all probably right, we are all doomed, we'll have straight line falls in house prices forever, accelerating unemployment, plasma TVs will break down just out of warranty, the IMF will come in and put interest rates up to 30%, and swine flu will kill the asteroid deflection teams. I see it all so clearly now

Personally I'm off to the racing. Have a nice day, and please don't worry so much. You'll all make yourselves ill and things are never as bad as you fear. In fact it's the things you don't worry about which usually get you.

lostinrates

julieq wrote: »

Have a nice day, .

you too. Mine has started well, a nice walk, back to bed with DH making me breakfast and now I'm getting ready to meet friends for lunch :beer::beer:. and we're getting a taxi: no driving for me!

dopester

julieq wrote: »

Are they going down forever dopester? Is this some sort of "new paradigm"?

Yes. The coming deflation is the fallout of the atomic age.

Interest rates may rise if Government p*off the markets, and they sell off gilts, or refuse to keep buying new ones, forcing interest rates to be raised.

That is why Labour (any party) only has limited manoeuvre room to mess around with channelling money in to non-productive schemes, or rescuing all debtors.

Government relies on borrowing from the market. A bit of QE can be tolerated by the market, when measured against other values falling.. and if thought the spending is trying to help the overall economy - but will madcap schemes be tolerated? That is the question. The markets don't want to be repaid in devalued/cheap money, just as I don't want my savings to be diluted at the sake of debtors and homeowners, who've already had so many years of a brilliant run and gains.

mewbie_2

julieq wrote: »

Personally I'm off to the racing.

Put a pound on "House Price Crash" for me. It's a dead cert to beat "Misguided Optimism".

julieq

Smart money goes on each way dear.

Fella

House prices will fall a lot further & faster once the election is out of the way. Brown is deparate to do anything he can to prop them up until then, hence 0.5% interest rates. Regardless of who wins, don't expect low interest rates post-election.