UK Gross Mtge Lending Eases To GBP10.3B In May - CML

Graham_Devon

Thrugelmir wrote: »

Average SVR is around 4.64% currently.

and rising........

Come on, don't let facts get in the way.

Though I do find it bizzare that when we talk about all those people able to keepo a roof over the heads only because of interest rates.... "most are on fixed". Yet when lending goes down its because... "most are coming off fixed and going to SVR".

It will soon be back to "yer but most are fixed" when it suits

Thrugelmir

chucky wrote: »

mortgage amounts were lower too, so repayments were easier to maintain..

your own post suggests otherwise

Originally Posted by chucky
you're right about the 15% another MSE urban myth
here are the BOE rates for that period

1991 Sep 10.50
1991 Jul 11.00
1991 May 11.50
1991 Apr 12.00
1991 Mar 12.50
1991 Feb 13.00
1990 Oct 14.00
1989 May 14.00
1989 Nov 13.00
1989 Aug 12.00
1989 Jul 10.50

Yes low mutipliers and high mortgage rates.

Thrugelmir

Graham_Devon wrote: »

Come on, don't let facts get in the way.

I prefer facts to spin. :rolleyes:

ad9898_3

Generali wrote: »

Interest rates rose to around 10% after the oil crises of 1973 & 1974 - that happened when the Arab nations decided not to sell oil any more to the US (and others?). Rapidly rising oil prices caused a recession coupled with high inflation

This is the critical quote in Gen's piece, this is certain to happen again as the West tries to come out of recession, we saw glimpse of it before the financial meltdown, inflation rising on the back of oil prices. It will happen again but unlike the 70's when the world was awash with oil and the arabs just 'turned the taps off', this time we are now on the plateau, with no more oil to pump, so prices will inevitably rise as demand picks up, pushing up inflation.

So it's quite possible we could see 10%+ IR's in 5-6 years time, especially if the plateau is coming to an end. Generali's statement here confirms it.

inspector_monkfish

bank of england historical rates back to Jan 1975
(looks like they gave up in Nov 2008, but we all know what happened since then !!)

http://www.omegaaccountancy.co.uk/bank-of-england/base-rates.html

Graham_Devon

ad9898 wrote: »

This is the critical quote in Gen's piece, this is certain to happen again as the West tries to come out of recession, we saw glimpse of it before the financial meltdown, inflation rising on the back of oil prices. It will happen again but unlike the 70's when the world was awash with oil and the arabs just 'turned the taps off', this time we are now on the plateau, with no more oil to pump, so prices will inevitably rise as demand picks up, pushing up inflation.

So it's quite possible we could see 10%+ IR's in 5-6 years time, especially if the plateau is coming to an end. Generali's statement here confirms it.

The amusing thing is, it's not demand pushing prices up almost daily of oil at the moment. It's the optimists and investors gambling and trying to make a buck.

All it will do is feed inflation and then we all go down again.

I just simply do not get what is wrong with a bit of regulation to provide stability. Not only for this country, but for the world economy.

I heard yesterday that if oil hits $100 a barrel again, on todays prices, we will be paying the same as the peak of $140 a barrel which really hurt inflation in this country.

chucky

Thrugelmir wrote: »

your own post suggests otherwise



Yes low mutipliers and high mortgage rates.

mortgage amounts were lower then with higher rates but smaller repayments.
today mortgage amounts are larger, rates are lower but higher repayments
compared all of this to salaries of each time too - looking at face value, it is cheaper now.

in saying that, i've done a rough calculation

1991 Average House Price = £60k, 14% Mortgage rate - BR+2%
Interest Repayment was £700 a month on 1991 salary

2009 Average House Price = £155k , 4.64% Average SVR
Interest Repayment is £599.33 a month on today's salary

ad9898_3

Graham_Devon wrote: »

The amusing thing is, it's not demand pushing prices up almost daily of oil at the moment.

Oh I agree whole heartedly, the 'real demand' will come when the West exits the recession, what we are seeing now is froth, when demand kicks in properly we will see $150 a barrel oil again very quickly, I don't see it edging much past this unless we get a healthly dose of inflation, as the 'world economy' relies on cheap oil, $150 oil is not cheap, so will likely send us back into recession again, this will repeat itself.

This is what I talked about yesterday in a thread regarding 'the saw tooth' of expansion and contration.

StevieJ

Generali wrote: »

Interest rates never went to 15% in the early 90s.

Interest rates rose after the 'Lawson Boom' (largely caused by interest rates being kept low as Lawson tried to get the BoE to have the Pound unofficially shadow the Deutschmark) and a house price boom caused by the pre-announcement of the ending of MIRAS (a scheme which allowed some mortgage interest to be offset against personal taxes I believe).

.

They went to 14.875% on Oct 6th 1989 and stayed there until Oct 1990, not 15% I grant you, I can confirm that mortgage rates were above 15% during that time.

http://www.bankofengland.co.uk/statistics/rates/baserate.pdf

Graham_Devon

chucky wrote: »

mortgage amounts were lower with higher rates but smaller repayments.
today mortgage amounts are larger, rates are lower but higher repayments
compare all of this to salaries of each time too

in saying that, i've done a rough calculation

1991 Average House Price = £60k, 14% Mortgage rate - BR+2%
Interest Repayment was £700 a month on 1991 salary

2009 Average House Price = £155k , 4.64% Average SVR
Interest Repayment is £599.33 a month on today's salary

Not really a fair comparison though.

It's the two ends of the stick. The absolute highest and the absolute lowest of any particular month.

It's two months compared against each other, completely missing the average payment.