Two more building societies increase interest rates

Harry_Powell

carolt wrote: »

Because - perchance - it might be relevant to House Prices, one of the subjects of the forum?

Or is that just too radical a rationale?

Then why did you not post a discussion on how you felt that the SVR changes for these two building societies would impact the housing market? Just posting news articles for other people to comment about seems a little trite. If, as you state here and elsewhere, that you enjoy discussing how events impact the economy and house market, then why don't you join in the discussion yourself?

Whay also, do you only seem to post details on negative events? Surely positive news stories also impact the movement of house prices and affect the economy? If, as you say, you're interested in discussing economic cause and effects, why do you take such a slanted approach?

nembot

Don't think Carol with implying this would change the market, but if it becomes a trend, it certainly will.

Harry_Powell

nembot wrote: »

Don't think Carol with implying this would change the market, but if it becomes a trend, it certainly will.

I'm not sure how this will change the market (I assume you mean house prices?). I would imagine that few people would choose to remain on SVR rates if they could get a cheaper deal elsewhere?

Thrugelmir

Harry_Powell wrote: »

I'm not sure how this will change the market (I assume you mean house prices?). I would imagine that few people would choose to remain on SVR rates if they could get a cheaper deal elsewhere?

If being the operative word.

Unless you've sizable equity and can move to HSBC for example. The options are reducing.

The market is fundamentally changing. Lenders are raising rates.

The N&P move was announced before Xmas so nothing new.

nembot

Well Harry, hah hah hah (Ok, not a great impression )

It's obvious it will affect prices to people who aren't on fixed rates.

Surely you're not going to deny low rates have helped high prices?

chucky

Thrugelmir wrote: »

If being the operative word.

Unless you've sizable equity and can move to HSBC for example. The options are reducing.

The market is fundamentally changing. Lenders are raising rates.

The N&P move was announced before Xmas so nothing new.

its over stated and exaggerated on this forum for it to be wide spread.

Thrugelmir

chucky wrote: »

its over stated and exaggerated on this forum for it to be wide spread.

I've seen little competition to lend money as cheap rates as many seem to believe would be the case. Totally the opposite in fact. What's happening is totally predictable. Lending rates are bearing less and less relevance to BOE base.

Harry_Powell

nembot wrote: »

Well Harry, hah hah hah (Ok, not a great impression )

It's obvious it will affect prices to people who aren't on fixed rates.

Surely you're not going to deny low rates have helped high prices?

It depends what you call 'low rates'. During the boom years, people's mortgage rates were around the 6% mark, which is historically quite low but nothing like what we have now.

I don't believe that the current short-term low BoE rates have helped that many people. A lot of lenders SVR rates are no different now than they were before the credit crunch, lots of people have been locked into fixed rates and others locked into discounted rates, but discounted against the SVR and not the BoE rate. There have been some lucky sods who managed to get BoE tracker rates at 0.5% etc, but I can assure that anyone who has been buying over the last 18 months are paying 'normal' 5% and 6% rates. I know I am.

chucky

Thrugelmir wrote: »

I've seen little competition to lend money as cheap rates as many seem to believe would be the case. Totally the opposite in fact. What's happening is totally predictable. Lending rates are bearing less and less relevance to BOE base.

absolutely - why would any lender lower their rates when there is a borrowing appetite to lend at a high margin of profit from anything between 2.5% to 4%.

the reference to overstated and exaggerated is directed at the number of people that it affects.

Harry_Powell

Thrugelmir wrote: »

Lending rates are bearing less and less relevance to BOE base.

Exactly, with some SVR rates at 5.x% does anything really think that if the BoE rate increases from 0.5% to, say, 4% we'll see SVR rates at 9.x%?

No, the lenders are setting their rates at a level that people are able to pay. Low BoE rates were never primarily intended to help the 'man in the street', they were to help banks rebuild their balance sheets.

Why people on here think we'll have armageddon when interest rates rise is beyond me. Most established mortgage holders bought when mortgage rates were around the 5% - 6% mark and so it will be no shock to their finances whem we return to those levels. Most FTBers who bought post crash have already got mortgage rates at 5% - 6% and these will largely remain unchanged by BoE rises.

If people are banking on a second crash caused by a rise in the BoE rate, they're going to be sorely disappointed.