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

stelaconcepts

IronWolf wrote: »

Rates going back to "normal" (I assume you mean around 5%?) won't hugely affect house prices I dont think (though it definitely wont help!), most owners Ive spoken too arent even getting the benefits of the low interest rates as the banks are reluctant to pass them on.

But what if we get a repeat of the past with double digit interest rates? That could mean trouble for the housing market. Noone knows how likely this is to happen, maybe in 5 years the economy will be looking peachy and inflation will be rampant. Who knows.

I know most do not benefit from the abnormal low base rate, but as the base rates rise everyones rate is affected.

Really2

stelaconcepts wrote: »

I know most do not benefit from the abnormal low base rate, but as the base rates rise everyones rate is affected.

Not entirely true, not every rate was affected on the way down so you would have to say not every rate will be affected on the way up.

Some rates rises are likely to be absorbed as margins head back to "normal" also.

stelaconcepts

Really2 wrote: »

Base rates wont be back up to 5% until the economy recovers.

So in theory there would be less defaults as we would be in a boom, the rates would be a reflection of that.

What if there is no recovery but things continue to worsen but inflation is getting out of control? Unless they can keep real inflation down then rates will have to rise considerably recovery or not.

I think its the message that would be sent by even a 0.25% base rate rise that is important. A lot of people still think rates this low are normal and will have a shock this year.

stelaconcepts

Really2 wrote: »

Not entirely true, not every rate was affected on the way down so you would have to say not every rate will be affected on the way up.

Some rates rises are likely to be absorbed as margins head back to "normal" also.

Everything works in the banks favour. Yes they did not lower all rates in line when the base rate fell to historic lows. But do you really think they will say ok lets be fair now and not make so much profit from the public as rates rise? They will use any excuse to raise their profits.

A bit like supermarkets putting up food prices more than the 2.5% VAT rise. Any excuse.

purch

Rates going back to "normal" (I assume you mean around 5%?)

The OP hasn't bothered to specify what is meant by "normal", nor has the OP bothered to respond to requests to do so.

Really2

stelaconcepts wrote: »

What if there is no recovery but things continue to worsen but inflation is getting out of control? Unless they can keep real inflation down then rates will have to rise considerably recovery or not.

Why, Do you really think with an economy with no recovery raising rates would stop inflation.
In reality it would make it worse as GDP falls and the £ would slide further.

Inflation can't carry on without wages increasing, inflation is not out of control we have tax increases adding 1%+ on to last year and this year.
We have also see oil costs increase and food costs due to one of events.

Non of those can be controlled by the BOE, they could make a very short respite but that would be followed by falling GDP and a falling £.

Really2

stelaconcepts wrote: »

Everything works in the banks favour. Yes they did not lower all rates in line when the base rate fell to historic lows. But do you really think they will say ok lets be fair now and not make so much profit from the public as rates rise? They will use any excuse to raise their profits.

A bit like supermarkets putting up food prices more than the 2.5% VAT rise. Any excuse.

You are aware this is not the Daily Mail's website?

ILW

stelaconcepts wrote: »

Everything works in the banks favour. Yes they did not lower all rates in line when the base rate fell to historic lows. But do you really think they will say ok lets be fair now and not make so much profit from the public as rates rise? They will use any excuse to raise their profits.

A bit like supermarkets putting up food prices more than the 2.5% VAT rise. Any excuse.

Any public companies first duty is to it's shareholders. That is the law.

MikeJ74

novazombie wrote: »

Like for instance people who have been saying for years that gold and silver were going to crash 100% guaranteed?

Do you still insist this is 100% guaranteed Hamish?

The title of this thread is a very reasonable question? Care to say why you think its below average intelligence to discus it?

Of course Hamish does not like this thread and he does not want to admit that when rates go back up it will have downwards pressure on house prices.

He may still try and argue gold and silver are going to crash soon but there will not be many who agree with him.

There is more chances house prices will crash than gold and silver at the moment. But nothing is 100% guaranteed he is an idiot to keep saying that.

Really2

MikeJ74 wrote: »

Of course Hamish does not like this thread and he does not want to admit that when rates go back up it will have downwards pressure on house prices.

Would you admit rates will only go back up to around 5% when there is upward pressure on house prices?