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

lemonjelly

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.

Really2 wrote: »

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

I think it is a little naieve to expect that bank rates will not at least match BoE rises on the way up, even though they did not match them on the way down.

ILW wrote: »

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

can you show me where that is on the statute books please?

Really2

lemonjelly wrote: »

I think it is a little naieve to expect that bank rates will not at least match BoE rises on the way up, even though they did not match them on the way down.

So you think Fixed will be 10% when base is 5% and variables at arround 8%-10%?

When a recovery is in place compertiion will increase having a downward pressure on margins.

You wont have 5% without a recovery so I do not think it is a little naieve at all. It is little naieve to expect everything to be the same as now yet a 5% base rate.

It will only get to 5% after a long period of good recovery.

Why anyone thinks current margins will be maintained when banks recover is beyond me.
When Businesses are strong they price to steal business or they die as everyone steal their customers.

I still expect capitalism to be in place.

Percy1983

HAMISH_MCTAVISH wrote: »

No really, what is it about topics such as house prices and immigration that attract people of obviously limited intellectual capacity with debating positions even a neanderthal would have realised were untenable.

Under normal circumstances I may have humoured the OP with a condescending rebuttal of their position, pointing out the obvious logical fallacies, and prompting them to put a bit more thought into breaking down and illustrating the mechanism through which such a process could be achieved. I'd then usually point out the contradictory nature of their assumptions, highlight the illogical basis of their argument, and pour myself another homebrew, made from the finest bear tears.

But I just can't be bothered today, so I'm off to get a fish supper instead.

You know what they say about people who think they know everything…

They infuriate those of us that do.

:rotfl::beer:

ukcarper

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.

It easier for banks to increase margins when interest rates fall as they know their customers can afford them. There is no point in having high margins if your customers can’t afford to pay them and default surely margins are a balancing act.

nembot

Really2 wrote: »

Mortgage rates of barely changed, so why do you think rates should go up if there is a downward trend?

Yes, but the ability to get a mortgage has changed dramatically - rates could be 0.15% but if only 1% of applicants are successful, doesn't really matter what they are.

Rising rates wouldn't affect me so much, only £10-£15 for each percentage point increase on the mortgage. But I appreciate there are others (probably in the millions) who would be affected greatly.

Ultimately, it's a tough choice...

Do the right thing and stuff a load of people financially or do nothing whilst accepting savers will suffer due to deflation of their assets.

I certainly don't have any answers.

myhouse_2

purch wrote: »

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

Do you really need an exact number. I assume all would agree that rates now are exceedingly abnormal.
Personally I would say anything between 3-8% might be deemed normal.

RenovationMan

I think you are going to be disappointed if you are pinning your hopes of a housing crash on distressed buyers. It is a well established fact that those who are benefitting from these low rates are feverishly overpaying their mortgages because they know rates will rise.

Those who are not benefitting from these low rates wont see much of a difference in their repayments when BoE rates rise because they are either on fixed rates or they are on sub prime mortgages that are already around the 6% mark.

History has shown that home owners will do anything in order to keep their homes during a downturn in their finances, even to the point where they go without food. The alternative for most people who are close to the edge is to rent, and often they can see that the monthly rental costs are actually more than their mortgages. This is especially true for families.

We will see an increase in distressed sales, but not in a volume sufficient to impact the UK housing market as a whole. All that will become available is the usual dross and ex-council housing and these are generally only available to cash purchasers at auction.

The mistake many people are making is to stick rigidly to a principle such as "not buying until the average house price falls to xx%", etc. Instead I would follow the advice and example of mbga9pgf and take a more holistic approach to your purchase, considering all financial aspects rather than just concentrating soley on the purchase price.

Really2

nembot wrote: »

Ultimately, it's a tough choice...

Do the right thing and stuff a load of people financially or do nothing whilst accepting savers will suffer due to deflation of their assets.

I certainly don't have any answers.

So you think the right thing is forget the economy and sort out the mild inflation we have due to oil, taxes and a few one off events with food.

What do you think the effect making the economy suffer would have on inflation and the £?

StevieJ

myhouse wrote: »

Do you really need an exact number. I assume all would agree that rates now are exceedingly abnormal.
Personally I would say anything between 3-8% might be deemed normal.

Or 0-3 low, 3-5 normal, 5-8 high .

purch

Do you really need an exact number

No.

It's just that there have been many threads and posts over the past few months that have often assumed that 'normal' base rates mean a number closer to double digits than most would agree with.

Personally I would say 5-6% would be the norm, but I would hope the OP would define exactly what he meant at some stage, as this would have a large impact on what the answer to the Q will be.