When interest rates to go back to normal many more distressed sellers?

buglawton

HAMISH_MCTAVISH wrote: »

That's not the long view. That's the skewed view, containing the 3 decades of the most abnormally high base rates in history.

This is the long view.....

.......

And to put things in perspective, the last time we had a financial crisis this serious. base rates stayed at 2% for 15 years.....

Folks on this thread had been thinking about interest rates over the last 5 years from recent property boom time to very recent (relatively) bust time. So I sought out a graph that would remind peeps how the last 50 years-ish looked. The really high base rates were during periods of UK hyper inflation or during the exit from the Deutschmark-tracking shenanigans. Interestingly, the highest interest rates were at times of exceptionally high govt incompetence, even above the usual running average of such incompetence. I put it down the the extreme short-termism that first-past the post voting creates.

OP asked when will interest rates goes back to "normal". I think OP was coming forom the direction that s/he thinks that rates - that is actually obtainable rates on a new mortgage for the average Joe - are currently too high.

shortchanged_2

Sibley wrote: »

There are nearly 3000 people on the council waiting list around here.

What has a council waiting list in Thailand got anything to do with it Sibley????

Confused???

Poshbird

Bohdy wrote: »

Normal rates are a matter of opinion. Yes 17% base rate is abnormal Hamish is right, but also 0.5% for so long now is also abnormal.

Who knows somewhere in the middle?

Somewhere in the middle would be around 7%. This would cause a crash.

chucky

HAMISH_MCTAVISH wrote: »

for those that expect rates to go over 3% antyime soon have a look at the period from 1934 to 1951 when the last comparable economic crisis took place... #dontholdyourbreath

FATBALLZ

HAMISH_MCTAVISH wrote: »

That's not the long view. That's the skewed view, containing the 3 decades of the most abnormally high base rates in history.

The same 3 decades you consistently claim is the 'long-term' trend defining where house prices are going to follow indefinitely?

Poshbird

chucky wrote: »

for those that expect rates to go over 3% antyime soon have a look at http://www.moneyweek.com/news-and-charts/economics/uk/interest-rates-will-rise-faster-and-higher-than-anyone-expects-12201

Interest rates will rise faster and higher than chucky expects

For now, the Bank of England is not going to do much about rising inflation in the UK. Wages over here aren't rising especially rapidly, and that's what the Bank is really worried about.
However, as star hedge fund manager Crispin Odey noted recently, this means that when rate rises do arrive, they'll be much more aggressive than anyone expects.

And that'll force interest rates a lot higher, and far more rapidly than anyone expects. Odey mentions 7%, but doesn't see that as a ceiling. That would be bad news for most stocks, but worse for bonds and far worse for house prices.

Poshbird

Bohdy wrote: »

The plain truth is no one knows. So those saying so sure that IRs can not go up that much that quick may be in for a rude awakening.

There is no doubt inflation will carry on going the way it is, so there is no doubt rates will have to go up.

buglawton

Only after rates rise will lenders reduce their humongous margins. I'm practically being paid not to move house by my current tracker rate. Would only consider moving once the diff between current and next mortg is modest. Wonder how may other folks currently have 'locked-in mortgage syndrome' like this?

Poshbird

buglawton wrote: »

Only after rates rise will lenders reduce their humongous margins. I'm practically being paid not to move house by my current tracker rate. Would only consider moving once the diff between current and next mortg is modest. Wonder how may other folks currently have 'locked-in mortgage syndrome' like this?

Exactly these unusual low rates are propping up prices, unusual high prices compared to wages or any other measure can not last.

Poshbird

MrPThomas wrote: »

Its obvious when rates rise there will be more distressed sellers. The question is how many, if there is a lot of foreclosures then this will have a big effect on house prices.

Yeah but some still think hese low rates will be around forever then everything else will catch up with house prices.