How do you think the interest rate increase will affect the market ?

F_T_Buyer

mikeyw wrote:

Well over a week has passed now guys - anyone noticed any impact ?

Nothing untoward in my local market (Harrogate)

What about others ?

You won't see any effects for months. What you will see is peoples attitudes change, and i've seen plenty of those!

ravenfield

my friend who has been looking for a place since last week, he has put an offer for a flat in newbury (the place was put up for sale for less than a month). his offer was 10% below asking price and so was rejected. today the owner called him and asked if he would consider increasing the offer marginally.

i guess that's pretty much the only effect you can get with a 0.25% rise . I hope we can have get interest rate of 6% or more. UK has yet to increase interest by any amount compare to others like the states and Japan.

Gorgeous_George

The next rate change is almost certainly going to be upwards. Maybe 2 or 3 more after that.

These rises could add 20-25% onto people's mortgages. If they have stretched themselves in order to buy, they may be in dire straights unless they fixed their mortgage rates. When the fixes end, the increase may be much more than 20-25% and their pay packets may not have increased very much. There will be tears.

My home is not for sale and nor is my BTL. My home is just that and not an investment. I've spent >£10K on the gardens/driveway over the past 2 years so definitely not an investment.

My BTL gives peace of mind to my aging parents who live next door as I/we 'control' the tenants. It gives me much more than money.

If I had other BTLs, I would be selling and realising some great returns. Then I'd sit tight and wait for the crash.

I expect houses to drop in value by around 30-50% from current values. This could be in 1, 2 or 22 years time. I do not expect them to rise much more than 10% (in most areas) in real terms - ever.



GG

mystic_trev

F_T_Buyer wrote:

You won't see any effects for months. What you will see is peoples attitudes change, and i've seen plenty of those!

Agreed - It'll take months and they'll be price rises for the next few months as well as there's only been a slight (if any) change in sentiment.It's going to take another one or two increases in IR's before most people start realising there could be a problem.

DontDoDebtKids

I've read enough to be tempted to add my 2p (sorry!).

This question has been vexing me for some time, but under a different guise.

I currently have a BTL flat I bought in 2003, now up about 25k in value. Obviously, the interest rate rise has decreased profitability. Added to that, the general view and, I think, the BOE's view is that interest rates are more likely to go up than down in the near future.

Leaving the question of whether house prices will go up or down, you need to consider the investment universe as a whole first.

The real question should be: can my money do better elsewhere? What percentage is the yield on my property relative to the equity I hold? Can I do better, say, investing in High Yield Shares?

Now, first, consider the property market: Trying to be as detached as possible, what are the possibilities for growth? A reasonable thing to say would be that, while people are hoping for a fall for whatever reason, it is more likely that prices will remain flat at best. There's no rapid growth here boys and girls.

Other options: Shares - FTSE is relatively cheap on a P/E rule of thumb calculation; Bonds - yields a bit useless; Commodities - there's a bubble waiting for a needle; probably others?

I am seriously considering selling up. I really like the place, as I lived there for two years, but I can realise a nice gain by selling now. Equally, I can forget about the markets and keep it. Depends on your investing style: buy and hold (forever) or chop and change.