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

buglawton

The average price is being shored up by soaring London values fuelled by a pound that has sunk historically low, foreign money and global speculation.

How relevant is this to "UK's hard-pressed families" ?

JonnyBravo

poshbird is PPR? [STRIKE]Whoever[/STRIKE]Whatever next eh Frank?

buglawton

Well, yes, benefits also shore up rents and property values, this is the money-go-round we all seem to subscribe to. At this rate the £ deserves to fall even lower against the 'honest' currencies.

geneer

HAMISH_MCTAVISH wrote: »

Why does this site attract people with below average intelligence?

I know, an old post.
But it was hard to resist.

buglawton

Yes, for a country like the UK with a massive & growing balance of payments deficit, no plan to earn it's way our (just some local scrimping & saving... how will that help?) to have such high local property prices with no sign of a let up is odd.

TedButler

It's not that odd that prices have not come down yet. Interest rates going up will no doubt bring on huge numbers of distressed sellers before the bank takes it off them. The longer the 0.5% rate remains the longer the problem will be postponed.

TedButler

We’re running out of options for delaying this crisis interest rates can only go one way,they cannot go down any more.

Delaying the house price crash any longer is getting very difficult.

HAMISH_MCTAVISH

It's now looking like interest rates won't even start to rise until 2013/2014, a full 6 or 7 years into the mortgage of those who bought at peak. And it's looking extremely doubtful that rates will cross 3% before 2020. By which point those who bought at peak will be nearly two thirds of the way through their mortgage.

And with wages still rising at an average of 2.5% or so a year, by 2020 that debt will additionally have deflated by at least a third in real terms. Even in the unlikely event that wage growth remains as weak as it is today.

It's Game Over for the housing bears.

Graham_Devon

HAMISH_MCTAVISH wrote: »

It's now looking like interest rates won't even start to rise until 2013/2014, a full 6 or 7 years into the mortgage of those who bought at peak. And it's looking extremely doubtful that rates will cross 3% before 2020. By which point those who bought at peak will be nearly two thirds of the way through their mortgage.

And with wages still rising at an average of 2.5% or so a year, by 2020 that debt will additionally have deflated by at least a third in real terms. Even in the unlikely event that wage growth remains as weak as it is today.

It's Game Over for the housing bears.

You are right, it is maybe looking that way, however, we are more aligned to the EU than the US in terms of monetry policy.

The US has "promised" (some say) to not raise interest rates. However, some economists are now concerned over how they can promise to do this, and those questions are now being asked, with one bloke saying as soon as the markets realise this promise can't be promised, they will most likely fall again.

As for game over. Doubt it. It's just getting interesting. The reason rates are so low is because the economy is in such a mess, something you seem hell bent on ignoring.

May I also remind you that your precious housing market cannot carry on in a sustainable fashion when only the people who currently have houses, can afford houses.

TedButler

Bohdy wrote: »

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.

Hamish will not like what Odey is saying, 7% and that is not a ceiling.

You need a lot of nerve to stay on a tracker for the next few years. Those who fix soon can sleep well at least for the term of their fixed rate.