Spring bounce in mortgage lending

Conrad

[QUOTE=Cannon Fodder;22361059

Would 6% not be affordable, you ask? - it may be ok for some.

Try reading the Mortgages & Endowment board. You'll find people on Interest Only, with a 50% equity purchase, and they cannot afford rates TODAY...why they should struggle with rates at 6%, I cannot fathom.


[/QUOTE]


Classic pessmist irrationality.

FACT;

The percentage of people repo'd in the last crash which had featured much higher interest rates = less than 1%

Ok so you sold at peak. Lets assume you buy back in with a 25% saving.
Your costs of selling, buying and no doubt altering/redecorating /curtains will take a big chunk out of that 25%. Was it really worth it?

Most of us coulnd't be @rsed to sell to let. It's only money.

Cannon_Fodder

Really2 wrote: »

:rolleyes:

I am not going to predict rates for the next 300 years am I.

I though petrol was cheaper than this time last year?
Inflation is YOY not MOM.

So you think inflation will kick in after the recession. So surely the wage inflation will stop the defaults just like the 70's and people mortgage will actualy be lower in real terms.

I am using a bit of logic here and what is accepted to be true in the near to medium term.

High inflation is guess work and not round the corner like you make out you know.

Petrol - peaked around August 2008. http://www.whatgas.com/unleaded-graph.aspx

So within 3 months inflation would no longer have those ultra-high values influencing it. Another 3 months for the lagging supply chain costs to shrink. Could be a rough timescale for inflation to bottom out. Meantime todays petrol continues to rise, go back into inflation, and re-start the supply chain increases, that also influence inflation.

Chuck on the growth that Mr Darling has promised us...is it IMPOSSIBLE for inflation to be going up in a year, maybe 18 months, time?

Also, you are assuming that inflation will be lead to wage inflation. Due to the lag in unemployment, it is possible that pay rises may remain subdued in a climate of overall, relatively high unemployment, whilst inflation and interest rates have already started going up.

"not around the corner" - depends on how you define the corner...

Of course this is all guesswork. By all of us.

Really2

Cannon_Fodder wrote: »

Petrol - peaked around August 2008. http://www.whatgas.com/unleaded-graph.aspx

So within 3 months inflation would no longer have those ultra-high values influencing it. Another 3 months for the lagging supply chain costs to shrink. Could be a rough timescale for inflation to bottom out. Meantime todays petrol continues to rise, go back into inflation, and re-start the supply chain increases, that also influence inflation.

It is not in inflation though is it look.. go back to last June.:rolleyes:

Why post such things when you can see.
To repeat for the 3rd time this week oil needs to hit $119.9 to be the same price in £ as last year.

Your graph shows it as deflated and is still cheaper than last year.

Also what about diesel how does that look

That looks to me on both graphs that both are in deflation yoy and that deflation is set to increase not decrease over the next two months due to the August spike.

To Add I don not get any benefit by deflation but at the moment it is fairly obvious the only thing proping up petrol is oil companies shafiting petro drivers as diesel (a more economic indicator) is fairly stagnent.

Cannon_Fodder

Conrad wrote: »

Ok so you sold at peak. Lets assume you buy back in with a 25% saving.
Your costs of selling, buying and no doubt altering/redecorating /curtains will take a big chunk out of that 25%. Was it really worth it?

Most of us coulnd't be @rsed to sell to let. It's only money.

Oh, I didn't do so deliberately, a survey put me off, so just sold and rented...when the crash hit, and not finding the right house around anyway...here I am still renting.

Having said which 25% is £70k. Meantime the pot is earning 7%, at the moment...its hardly cost a penny, so far.

Just wanted to make the point to Dan, that not every one on here is *desperate* for prices to drop...

Like you wanted to find the best deal during your cold feet stage, I am weighing the options and biding my time.

Cannon_Fodder

Really2 wrote: »

That looks to me on both graphs that both are in deflation yoy and that deflation is set to increase not decrease over the next two months due to the August spike.

"deflation is set increase over the next two months" - Fine. Have not said it won't.

I thought you were making predictions of the next 12-18 months.

So, in the NEXT 6 to 12 months, after those two months?

Deflation will presumably slow down, stop, and turn around back into Inflation as this January's ultra-low price is reversed by THIS June's high price...

And with market recovery boosting oil prices further, analysts have said today, by NEXT January there could be further inflationary increases to take into account...

Cannon_Fodder

The 70s cannot be a perfect comparison, as the union situation is different.

High wage demands are not certain in the event of inflation.

Public sector might try it. i.e. London Underground.

Private might be grateful of not being among the 3 million or whatever figure it is by next year.

So it is possible that cost-push inflation needs containing in a year or two. Relative to where we are now with heavily discounted goods around. Not necessarily "high" in "past experience" terms...

Really2

Cannon_Fodder wrote: »

"deflation is set increase over the next two months" - Fine. Have not said it won't.

I thought you were making predictions of the next 12-18 months.

So, in the NEXT 6 to 12 months, after those two months?

Deflation will presumably slow down, stop, and turn around back into Inflation as this January's ultra-low price is reversed by THIS June's high price...

And with market recovery boosting oil prices further, analysts have said today, by NEXT January there could be further inflationary increases to take into account...

So inflation over 2% will cause an increase when in recovery.
So in recovery will we not see wage inflation then.

I have no doubt we will se some inflation as we are currently deflating. But i dont believe we will have high inflation.

i think the people saying some kind of inflation are just to undecided themselves.
Of cause we will have inflation but then failing to link wages and inflation in a recovery seems a bit dumb because it will happen.

So it wont be the bloodfest you want,
You seem to think/touting it will be inflation in goods, static wages and decreasing assets.
That ain't a high inflation environment is it.

Really2

Cannon_Fodder wrote: »

The 70s cannot be a perfect comparison, as the union situation is different.

High wage demands are not certain in the event of inflation.

Public sector might try it. i.e. London Underground.

Private might be grateful of not being among the 3 million or whatever figure it is by next year.

So it is possible that cost-push inflation needs containing in a year or two. Relative to where we are now with heavily discounted goods around. Not necessarily "high" in "past experience" terms...

Sounds like the "perfect HPC storm"

Have the bears started it is "differnet this time" and to think of all the arguments of bears saying look at the past over the last year or so.
looks like the past is only somthing that fits on the way down:)

Everybody saw wage inflation in the 70's not just people who worked under a union, self employed, benifit claiments everybody.
The other thing they saw was mortgages deflating in real terms.

Cannon_Fodder

Conrad wrote: »

The percentage of people repo'd in the last crash which had featured much higher interest rates = less than 1%

I bought at 12%. My mortgage was a type that reviewed the rate annually so I missed out on 15%.

If I had not, then a 25% increase would have been painful, and indeed many people fell into arrears and led to repossessions. All of which impacted house prices, further.

Being 1% of the market is not telling the whole story. I'm sure we have done the rounds on this before, a year ago...it only takes 1 house to be repossessed in a street/area, and that can affect the nearest 100, 200, 400? houses.

Especially with the internet, people look up sold prices, and it influences their offer. They don't all research why it sold for what it did.

So, the effect on the market is more than a "mere 1%", as all the neighbouring properties are re-priced, to some degree, almost automatically.


This time, people who signed up to 3% or 4% between 2003 and 2005, have converted over to tracker or dropped onto SVR around 3% or 4% and are thinking, "phew, that's lucky".

The problem comes, when rates get to 6%, either tracker/SVR, or they are a bit late in fixing, then that is a 50% to 100% increase...

That won't be painful, for some people?

chupov

Joeskeppi wrote: »

Or a fictional figure.

a bit like you then .... no need to dither, daddy-o