Low interest rates will support house prices until 2014

nearlynew

I haven't read all of this thread.......... I gave up about a third of the way page one.

I'd just like to say........

Wouldn't it be brilliant now if we all borrowed a shed load of cheap money while we can and went on a house buying spree and HPI took off agian ?

And then in say, 10years time, someone well qualified and earning decent money will not be able to afford prices because thay were born 10 years too late.

Fanf*ckintastic

the_ash_and_the_oak

nearlynew wrote: »

I haven't read all of this thread.......... I gave up about a third of the way page one.

I'd just like to say........

Wouldn't it be brilliant now if we all borrowed a shed load of cheap money while we can and went on a house buying spree and HPI took off agian ?

And then in say, 10years time, someone well qualified and earning decent money will not be able to afford prices because thay were born 10 years too late.

Fanf*ckintastic

But there isn't a shed load of cheap money available imo. The rates being talked about aren't really available to go out and borrow

Mr.Brown_4

the_ash_and_the_oak wrote: »

But there isn't a shed load of cheap money available imo. The rates being talked about aren't really available to go out and borrow

It's confusing though when Harvey Jones seems to say that cheap rates means there wont be a drop? We can't all be right, can we?

kriss_boy

HammerSmashedFace wrote: »

However I disagree about rates, in my view there is virtually no chance of rates staying as low as they are today for that period of time, of course those who have debt see/hope things will be different.

I'll second that.

Call me niave but I know many, many people like myself that are far better off thanks to the crash of the BoE int rate.

Surely if many people are far better off than before then its only a matter of time before the rate starts easing its way back up to 5/6% over the next couple of years.

the_ash_and_the_oak

Mr.Brown wrote: »

It's confusing though when Harvey Jones seems to say that cheap rates means there wont be a drop? We can't all be right, can we?

In the end I'm sure we'll all be correct because we'll all have said the same thing

I guess my understanding of the argument is that cheap rates for existing owners means they're not under pressure to sell - and that this will continue for long enough that those who would have been in trouble pay down some of the debt, and that they won't be selling during this period - which will leave supply low - and is just as well because the cheap money for new people to buy from them isn't really that cheap or available - leaving demand low...and perhaps give everyone a few years breathing room....

...kinda?

Thrugelmir

the_ash_and_the_oak wrote: »

In the end I'm sure we'll all be correct because we'll all have said the same thing

I guess my understanding of the argument is that cheap rates for existing owners means they're not under pressure to sell - and that this will continue for long enough that those who would have been in trouble pay down some of the debt, and that they won't be selling during this period - which will leave supply low - and is just as well because the cheap money for new people to buy from them isn't really that cheap or available - leaving demand low...and perhaps give everyone a few years breathing room....

...kinda?

Yep.

A full 25 years to go through the whole cycle.....

Next time the peak will a lot lot lower.

the_ash_and_the_oak

The main things from his article imo are these

"as lenders gradually reduce their rates and soften their criteria, it might become yet more affordable."

This is true imo. If rates available to FTBs got cheaper and more accessible it would certainly increase prices imo. So the first question for me is - are rates/availability going to improve. But then...improve from todays levels? or improve from 2007s levels. I would say 2007s - but the counter-argument could be that with reduced supply then maybe from today. That however doesn't sound like any kind of recipe for stabilization (or ease of sale any time soon)

"Anybody who wants to buy a property but can't find a mortgage must be in despair right now, watching prices creep further out of reach."

Well if his earlier point is true that lenders are going to reduce and soften then this shouldn't really be a problem?

"Yes, cheap money is creating another property price bubble, our flailing economy apparently can't stay afloat without one. It's not pretty, it's not rational, but it's what's happening."

Bubbles imo are characterized by high volumes with sales to people who couldn't normally afford. This seems more like patching up an existing balloon than blowing a new one

Thrugelmir

the_ash_and_the_oak wrote: »

The main things from his article imo are these

"as lenders gradually reduce their rates and soften their criteria, it might become yet more affordable."

This is true imo. If rates available to FTBs got cheaper and more accessible it would certainly increase prices imo. So the first question for me is - are rates/availability going to improve. "Anybody who wants to buy a property but can't find a mortgage must be in despair right now, watching prices creep further out of reach."

Well if his earlier point is true that lenders are going to reduce and soften then this shouldn't really be a problem?

"Yes, cheap money is creating another property price bubble, our flailing economy apparently can't stay afloat without one. It's not pretty, it's not rational, but it's what's happening."

Bubbles imo are characterized by high volumes with sales to people who couldn't normally afford. This seems more like patching up an existing balloon than blowing a new one

There is going to be a captial squeeze on the banks. Around the world. The G20 countries are in agreement on this. Though until the world economy no longer requires financial stimulus to keep it afloat, the contraction cannot start.

Available credit will diminish. Banks won't need to lend riskily.


Bubbles are created by amateur speculators that believe they know something no one else does...... think of DotCom boom. The amateurs are always the last people to exit a market. The smart money has been moving out for a while. Drip selling so as not cause disruption.

Emy1501

the_ash_and_the_oak wrote: »

In the end I'm sure we'll all be correct because we'll all have said the same thing

I guess my understanding of the argument is that cheap rates for existing owners means they're not under pressure to sell - and that this will continue for long enough that those who would have been in trouble pay down some of the debt, and that they won't be selling during this period - which will leave supply low - and is just as well because the cheap money for new people to buy from them isn't really that cheap or available - leaving demand low...and perhaps give everyone a few years breathing room....

...kinda?

How I get it really. From I can see though many people feel everythings back to normal so rather than paying off debt I'm seeing people taking on more and spending the money they are saving on mortgage on anything but sorting out their debt.

Also many sales these days have a heavy cash involvement. I cant see this carrying on for too long I see money from the cash rich drying up by early next year. Also for what ever reason, the three D's, out growing house, needing to downsize to fund retirement etc there will always be people needing to sell. Many have put off this year but they can't put it off for ever.

Think there could be a chance the writers got it wrong.

ManAtHome

Obviously one of them New Paradigmy things - global recovery with absolutely no competition for finance, resources, or labour which would push prices up. The G20 sitting around The Big Table divvying up manufacturing and services so everyone can have just the right amount of economic growth to pay down government debts... All that, and alsmost unlimited amounts of very cheap cash - pah! some doomsayer will come along and spoil it.