Autumn will be the time when price will fall long way

StevieJ

inspector_monkfish wrote: »

how about someone who has just been made redundant
could be quite a few of them still over the coming months

Mr Brown will be paying it (sorry I meant You and I)

StevieJ

Yoshua wrote: »

Summer is sunny and people are happy.

Seems the government men have been successful at decieving people, the amount of people on here think that its over and house prices will actually go up even more.

Wait until its cold and grey and wet AND interestrates are shootingup and people cant pay their mortgages.

Then we will see how much the government can decieve people then.

I think I would rather ditch the house in the sunny summer tham approaching winter :eek:

whathavewedone

I think interest rates will be kept low no matter what the economic circumstances are until after the next election which now looks to be on course for next May.

Labour's only chance of winning the next election is if they can look as though they have fixed the economy. They will go all out to do just that even if they destroy it even further in the process.

Consequently I don't see prices tanking this Autumn. Interest rates are going to rise at some point, of course they are, but it won't be this year, not by a significant amount anyway.

Also there are probably more people on fixed mortgages than you think. When we took out ours last October petrol was going up, food was going up, the bank of england said they were probably going to have to put rates up - we can't have been the only ones to think that a fixed rate mortgage looked like the best option at that point.

geoffky

In 1929 90% of the people who lost their money thought that the market had bottomed out and they could not lose any more money and piled into the markets.
These guys where wiped out.......history has a habit!!!

Max_Headroom_3

I think it's a valid point that there are a whole layer of homebuyers currently only able to survive because low interest rates equate to low(er) outgoings.

I know several people who will be in big problems if/when interest rates rise significantly.

So I think the only variable here is not whether rising interest rates will have an effect (they will), but if interest rates will rise significantly, and if so when?

Max_Headroom_3

Incidentally, I suppose it's also worth considering that there are possibly many BTL landlords only making the numbers work by dint of low interest rates meaning that rent currently outpaces mortgage outgoings.

Remember, in the height of the frenzy, many were buying with little or no regard to rental income vs mortgage, as long as they could cover costs they were banking on the value of their property increasing to make their money.

With, in many cases, serious negative equity and the numbers finely balanced on the basis of low interest rates, what happens if those rates rise significantly? Armageddon for many I'd imagine.

Consider also the amount of tenants losing jobs and suddenly "uh oh, sorry Mr. Landlord, no money for rent this month". The bigger the "property portfolio", the more risk of this occurring too. For sure the landlord can kick them out, but it all takes time (to get them out and to find new tenants) and that costs money, lots of money.

I'm certainly not going to begin to guess at when, but I'm firmly in the camp that believes that for all sorts of reasons, if interest rates rise significantly then there is going to be a whole new tidal wave of issues set to sweep across the economic landscape.

amcluesent

Economics will be driven by two events in the next 12 months. Flu pandemic in the autumn, easily 5,000,000 sick, thousands of peeps aged 15-45 in hospital. And the general election and immediate austerity budget - tax rises, IR rises to get a grip on inflation, 10% cut in public spending...

PasturesNew

lostinrates wrote: »

Are non working partners classed as unemployed? I can't remember. There are a fair few of us bout, SAHPs. I have no idea how many though.

I think to be classed as unemployed you have to be registered as unemployed and actively looking for work, signing on every fortnight.

So no.

Have you looked at what you'd get if your OH lost his job? He'd be entitled to contributions based JSA (maybe), you - ? Who knows. Because you're living at his parents' house it will affect the claim.

mvengemvenge

Dan: wrote: »

yes, otherwise it's nothing more then nonsense

Does this mean, Dan, that every single post you've made without a fact in it is nonsense?

Thanks for your honesty

mitchaa

Max_Headroom wrote: »

I think it's a valid point that there are a whole layer of homebuyers currently only able to survive because low interest rates equate to low(er) outgoings.

What is valid about that, please explain.

If someone budgets £1000pm for their mortgage and it drops to £400 because they come to the end of their fixed rate and put onto the lenders SVR they do not then budget for £400.

Surely not

They'll keep the same £1000 for their mortgage and either over pay their mortgage by £600pm or p*ss the £600 extra up the wall. With interest rate rises, they might only pi** £500 up the wall next month, £400pm the month after, and so on and on.

When it gets backs to £1000pm or even beyond, why assume they cannot afford it? If it were me in the above situation, that £600 would either have been overpaying my mortgage with or put into savings for if and when interest rates do make the payment exceed the £1k pm mark.

6 months = £3600pm in the above scenario, 12 months = £7200. Interest rates rapidly increase so my mortgage payment is now £1200, but hey ive saved £7200pm from above so i can then afford 3 yrs worth of payments at £1200pm and be no worse off than when it all started.

The majority will have been paying 5-6%, they are now paying 3-4%, dont kid yourselves that they'll then struggle when interest rates get back to 5-6-7%. That is just wishful thinking

Do a little research back, what rate were FTB's getting with a 90% LTV 2yrs ago with BOE BR @ 5.5% and what are they getting now with a BOE BR @ 0.5%? 5 percentage point in the base rate difference but hardly nothing at all being different. If its like that on the way down from 5.5% to 0.5% can we therefore assume it will be like that on the way back up to 5.5%? I would say quite probably