Get ready for the housing crash part II

carolt

Kenny4315 wrote: »

Another few months at this rate of recovery and we'll be heading for a boom period as the sheep in rented hoping to make a killing by selling then buying later start to PANIC, and start trying to buy whatever the cost.

Still looking to buy carolt or have you bought yet ?

No, I'm not currently looking to buy.

How are your BTL's doing?

purch

towards the end of 1992 they were back to normal 11.5% (which is when prices bottomed out for us). So for a year and half rates were what I would term high

Which is why when people try to claim that "under the Conservatives mortgage rates were 15%" they are way wide of the mark !!!

Idiot Boy Lamont did put the Base Rate up to 15% in September 1992, but it didn't last long enough even to get into the following days Newspapers :eek:, let alone feed into general Lending Rates.

baileysbattlebus

purch wrote: »

Which is why when people try to claim that "under the Conservatives mortgage rates were 15%" they are way wide of the mark !!!

Idiot Boy Lamont did put the Base Rate up to 15% in September 1992, but it didn't last long enough even to get into the following days Newspapers :eek:, let alone feed into general Lending Rates.

These were the mortgage rates from the end of 1989

End of 89 14.5% until March 1990

March 1990 - Nov 1990 15.4%

Dec 1990 - Apr 1991 14.5%

May 1991 - 13.75

Base rates were 15% from October 1989 till November 1990 - when they dropped to 14.5%

kennyboy66_2

purch wrote: »

Which is why when people try to claim that "under the Conservatives mortgage rates were 15%" they are way wide of the mark !!!

Idiot Boy Lamont did put the Base Rate up to 15% in September 1992, but it didn't last long enough even to get into the following days Newspapers :eek:, let alone feed into general Lending Rates.

They were 15% or thereabout from 1979 - mid 1982, when Idiot Boy Howe squeezed the life out of UK industry, sending sterling to $2.40 then back down to $1.07 by 1985.

Lets hope they don't go for the hat-trick.

the_ash_and_the_oak

So if mortgage rates were around 11-12% in 1987 why were high interest rates the cause of the last crash? If you had borrowed in 1987 at 12% how much more a month would you be paying in 1990?

purch

sending sterling to $2.40 then back down to $1.07 by 1985

1.0508 to be exact

You people with the FACTS always have to go and ruin my arguments !!!! :rolleyes:

Really2

purch wrote: »

1.0508 to be exact

You people with the FACTS always have to go and ruin my arguments !!!! :rolleyes:

Not really if they shot base up to 15% you would expect mortgages to have been way over 15.4%

So base did not look like a representation of what the money markets were doing.

I think your point is still very valid. (EG the mortgage companies did not respond in the same way)

Kenny4315

carolt wrote: »

How are your BTL's doing?

Doing rather well at present, low interest rates, 100% occupancy for full year, all repairs up-to-date and major expenditure undertaken, and likely to be occupied for the foreseeable future, and encouraging signs of a house price boom .... :beer:

chucky

the_ash_and_the_oak wrote: »

So if mortgage rates were around 11-12% in 1987 why were high interest rates the cause of the last crash? If you had borrowed in 1987 at 12% how much more a month would you be paying in 1990?

the mortgage interest payable on an average property 1990 would not be much less than the mortgage interest payable on an average priced property today.

1991 Average House Price = £53,635, 14% Mortgage rate - it was a couple of % higher then too
Interest Repayment was £626 a month on 1991 average salary

2009 Average House Price = £161,816 , 5% SVR
Interest Repayment is £674 a month on today's average salary
http://www.nationwide.co.uk/hpi/historical.htm

the_ash_and_the_oak

chucky wrote: »

the mortgage interest payable on an average property 1990 would not be much less than the mortgage interest payable on an average priced property today.

1991 Average House Price = £53,635, 14% Mortgage rate - it was a couple of % higher then too
Interest Repayment was £626 a month on 1991 average salary
2009 Average House Price = £161,816 , 5% SVR
Interest Repayment is £674 a month on today's average salary
http://www.nationwide.co.uk/hpi/historical.htm

Had kind of assumed this to be the case.

(was curious why someone borrowing at 12% in 87 would be struggling with 14% in 90 tho)