MSE News: Base rate held at 0.5%

brit1234

jd87 wrote: »

Tough !!!!.

Tough on those doing the right thing and prepared to support the economy. Money from savers allows more loans to small businesses and mortgages. First time buyers saving deposits are loosing thousands in interest each year. Pensioners reliant on their savings are suffering even worse.

It was too low interest rates which got us into this mess, too low interest rates won't get us out.

http://www.youtube.com/watch?v=tDkNPNSgiaY&feature=channel_video_title

Devs_2

I think those that are retired need to remember, they bought houses much cheaper than we can today. Your pensions are better than ours will ever be

Young people are struggling to get on the property ladder or pay for the huge mortgages required to buy an house.

Yes, you have saving not making much interest, but you never had to pay the interest of such big mortgages as the young do today. Give them a break and if your struggling for funds, downsize to a samller property.

Interest rates need to stay low to help those that are paying mortages survive, especially now with all the public jobs cut and pay freezes happening across the country.
:T :money:

rickbonar

jd87 wrote: »

Tough !!!!.

Sooner or later though the government will raise these interest rates with a vengeance ... especially if come June many people with savings here start putting their money offshore in places like Hong Kong, Belize and Panama if you know what I mean J ... I know the majority of our distinguished and honourable members of parliament already have their savings in such jurisdictions so you got to wonder how this may impact the UK economy when those naughty and criminal scallywag members of the public start joining them. There may trouble ahead....
L

U can bet your house on it:shhh::shhh::shhh:

rickbonar

Devs wrote: »

I think those that are retired need to remember, they bought houses much cheaper than we can today. Your pensions are better than ours will ever be

Young people are struggling to get on the property ladder or pay for the huge mortgages required to buy an house.

Yes, you have saving not making much interest, but you never had to pay the interest of such big mortgages as the young do today. Give them a break and if your struggling for funds, downsize to a samller property.

Interest rates need to stay low to help those that are paying mortages survive, especially now with all the public jobs cut and pay freezes happening across the country.
:T :money:

You are correct older people have bought their houses significantly cheaper in real terms than they are priced today. If you look at the average wage in comparison to the house price of years ago and with today it is true.

However everyones who in the last 5 to 10 years have been hoping to make money by buying and selling their houses and many have made a lot now won't accept that their little 3 bed terrace house near the station isn't worth the £650,000 that Kirsty and Phil told them on the television.

Ok so they've paid £500 grand mortgage and the local estate agent tells them to "hang on and wait for the recovery to kick in" and they can then sell it for £1,000,000. He can give up his job as a fitter at Kwik fit and his wife can leave Tesco's. But we're only earning £35k between us! oh dear! But the mortgage advisor in Lloyds told us we couldn't lose ... oh dear!

Jojo1daffy

Devs wrote: »

I think those that are retired need to remember, they bought houses much cheaper than we can today. :money:

Houses were a lower price not cheaper, wages were much lower and interest rates were much higher than they are today.
I first thought about getting a mortgage in 1988 - I could get 2.5 xs my salary (£5k) at a push and couldn't afford anything that I would've actually wanted to live in. I eventually got my first mortgage in 1994 - still 2.5 xs my salary (£13k) which was then higher and I bought my first house for £36k. You had to have AT LEAST a 10% deposit and the mortgage I had was one of the best deals about at the time - fixed for 3 years at 7.5%. The rates had not long since come down from being 16%.

It's all relative.
But no I'm not a pensioner....yet......:rotfl:

rickbonar

I forgot to add to young Devs here...

Young people are finding it nigh on impossible to get on the "property ladder" ... always makes me laugh that phrase as if there is some ladder when it's really like careers i.e. people are perpetually caught on the first rung or two. (Then they snap as they try to climb further)

Why are young people unable to get into buying a property ???and will possibly end up living with mum and dad till their 50s when they finally get a house as they inherit it (if the government don't sell it for mum's care home fees of course)

What's the answer ...... the property prices are now way beyond the common wage levels for mortgage payments. People already with property can borrow with the existing equity but the prices would only have to slide a few per cent to wipe out any chance of them paying the new mortgage back.
Hence why the government are so cagey about putting the rates up ... But just look how the £ and $ have fared against foreign currencies lately...

Mr Brown and Obamas measures are quietly robbing us blind. ( The american house prices are much better value than our btw)

I reckon their way around it at some time in the forseeable future will be to change us over to euros ... the values of everything will fly into confusion and no-one will be able to tell how just much they have lost.

opinions4u

Having just driven through the town centre I now know why many young people struggle to get on the property ladder.

They are too busy drinking their income in excessive quantities.

Devs_2

Not everyone drinks yet many still are unable to afford the first step on the property ladder, for the one that stated young Devs, I myself am way up the property ladder and have a fair bit of savings earning no interest. (My problem, not the porblem of the ones struggling to pay there mortgage and currently breathing relief every month when the rate stays low).

My younger sister however who I might had doesn't go out drinking and spending everything she earns on drink is currently single and although just managed to save the deposit to get on the property ladder is on the point of using her overdraft every month.

One of our neighbours who managed to get on the property ladder a three years ago started a family last year and has just been made rudundant due to the cut backs in local councils.

To add to
rickbonar
property prices 30 years + ago are not in par with house prices of today.

My own parents paid just £3750 for there rather large house 40 year ago, struggled to get the deposit at the time but as wages rose, quickly paid off that small mortgage.

The size of house purchased today by young people is about 1/3 the size of the houses purchased in years past so dont Young Devs me. Some new house buyer are lucky to afford a 2 up 2 down terraced house these days.

What I am saying to you all is the same as the post above by jd87
"Tough"

The longer the low base rate stays the better it is for all those people struggling to afford the costs inthe first place.
:money:

rickbonar

40 years ago was 1971 and the average house price was around £5600. Average wage was around £20 per week or per annum now: £1000. Mortgage would lend 3.5 times your annual gross income. thereby £3500. I suppose with the wife's wage taken into consideration would make up the rest.

The biggest single thing that bought the houses then as up until recently ... the rampant inflation of the early to late 70s triggered by the move from £SD (pounds shillings and pence) to decimal £s and pence.
Companies overnight made millions (because the currency didn't translate exactly so they rounded UP) found that this difference made money then forever started fiddling with quantity & sizes to confuse the public. Petrol for example was always in gallons and so on.

Anyway there was high inflation and the house at £4500 and mortgage of the same looked a steal 10 years on ... and 25 years on.... well chump change.

A recent price assessment reckoned that a modern £ is worth around the same as the old shilling back in 1970. Now there were 20 shillings to a pound so applying that to the house price makes it £112,000 in todays money and wage would be £400 per week. (which is roughly what they say it is now). However according to the bbc site the average house price in March 2011 is £232628.

http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm

So you can see that house prices are relatively out of kilter with the past and the present wage.

rickbonar

Beware of the property snakes... new estate agent cliche

I started in a bedsit and then slowly progressed up the ladder to a 25 bedroom stately home but quickly slipped down the snake and eventually ended up sleeping in a cardboard box :eek::wall: