Interest rate raise already having an effect ?

Jorgan_2

meanmachine wrote:

Well if they've already got their mortgages in place...

I hope for your sake you're right. Otherwise your stock is going to seem rather overpriced in the coming months...

Overpriced compared to what?

Some of the viewers have mortgages in place, others have yet to sort them out. They are still happy to view & in some cases offer & agree to buy property.

This may come as a surprise but some people actually buy a home to live in & raise a family, not as an investment thats going to shoot up in value.

You may not have seen a post from an EA regarding a slump because it may not be happening. I can only speak for my office but we have done more business year to date than last year, agents need volume rather than booming house prices to be successful.

meanmachine_2

No, I meant the slump from 2004 to mid 2005. Or are you denying there was one? Maybe there wasn't in your area.

I'm glad this rate rise hasn't hurt your business. Strange then that so many estate agencies (Your Move, Haart) have starting whinging in the national press.

Anyway, mustn't keep you. I'm sure you're rushed off your feet Jorgan...;)

Jorgan_2

Wot the one from June 04 to about June 05? Yes the number of sales were down compared to the previous two years, but those two years were crazy, people offering before seeing properties, offering thousands over the asking price to try & secure a property.

Fortunatley we realised quite early on that things had changed so changed the sysytems we had in place to deal with this. As I said in my earlier post, time will tell if the rate rise is going to have a massive effect.

meanmachine_2

Jorgan wrote:

Wot the one from June 04 to about June 05? Yes the number of sales were down compared to the previous two years, but those two years were crazy, people offering before seeing properties, offering thousands over the asking price to try & secure a property.

I can't believe people would make the biggest purchase of their lives without at least viewing it 2, 3, 4, 5 times over.

The British public really are/were gripped by property fever.

I don't think a small rise in IRs is going to cure the crazed patient, but it might make them see sense a little.

UK007BullDog

Most lenders have already increased their rates in June and July due to the swap rates and it cost them more to buy money, to lend to people wanting mortgages.

The rise will kick in by end of the month as the lenders are now reviewing and analysts mulling over profit points. I expect it to go up even further, maybe another rate rise in Nov/Dec 06.

The rate rise will only harm those already struggling. What is an average £12 ? A couple of beers or so in a pub! It will eat into the margins of those who have tracker rates are BTL on a very tight budget. That is why doing a BTL put down more than 15% to give the buffer some space. Personally I would never go with trackers, always just fixed rates to be able to budget and ride out any eratic rate rises.

I saw some comments on here that all of the UK will now suffer due to the higher rate. That is not the case as a high number of people are also on capped trackers so even if the rate rises another 2% or more it will not impact them.

Those who fixed with 3, 5 or even 10 years will sit cosy for the time being. Yes, fixed are a bit more expensive however this rate rise has already narrowed the gap between fixed and tracker. Plus a family fixing for a long term know exactly what to expect for a long time and can sit back and forget the rate rises, until it is time to remortgage of course ;-) or moving house, up or down scaling.

My local EA's had a bumper month and the lettings department has no further properties on their books. The local banks and big city blue chips are hiring like crazy and there is just not enough housing stock available for lets. Some are not even haggling, just to get a place to live.

realwildone

Overpriced compared to what?

Some of the viewers have mortgages in place, others have yet to sort them out. They are still happy to view & in some cases offer & agree to buy property.

This may come as a surprise but some people actually buy a home to live in & raise a family, not as an investment thats going to shoot up in value.

You may not have seen a post from an EA regarding a slump because it may not be happening. I can only speak for my office but we have done more business year to date than last year, agents need volume rather than booming house prices to be successful.

What a load of EA bull. The rate rise will and maybe already has had an effect on the market. The suspicion of more rises will kill it.

HenryWeston

robwend wrote:

the raise only raises the average mortgage by £12.00 a month <so they papers say> so i doubt thats the reason

........on an average mortgage of £80,000 lol i think a few people may have mortgages slightly higher than that:rolleyes:

robwend

well my attitude is, if you havent got about £50.00 a week CLEAR left over your income a week you shoudnt get a mortgage,

Graham_Devon

How they came up with £12 is laughable. So the average property price is now £160 odd thousand. Say a buyer goes in with a 10% deposit, they need a mortgage for £144k.

Over 25 years, at 4.5% their repayments would be £809.26 (repayment)
Over 25 years, at 4.75% - £830.22

Thats a difference of £21.

The calculator I'm using actually states 'be careful, if the interest rate rises to 12% your repayments would be £1529....scary!!

This is on only a £144k mortgage....

Those with a 220k mortgage will see a rise of £32 a month.

Who really, apart from those who bought before the boom will see a £12 rise. Averages are great, but this is average of many many years and doesn't look at todays prices very well at all.

It's now a lot harder for first time buyers.

Jorgan_2

meanmachine wrote:

I don't think a small rise in IRs is going to cure the crazed patient, but it might make them see sense a little.

No harm in hoping.