Britons agree property is overvalued.

Really2

LisbonLaura wrote: »

Ahh, the simplistic view, which neatly avoids a few moral hazards.

Simplistic? care to divuldge what is simplistic, and what moral hazards it avoids.

Or are we doing soundbites?

LisbonLaura

Really2 wrote: »

Lowering the value of a currency is fairly standard practice in a recession.

I would have thought being in Lisbon you would appriciate that Laura? (Or anyone in Ireland or Greece?)
.

Appreciate? Yes. - Join-in at my expense? No way.

Really2

LisbonLaura wrote: »

Appreciate? Yes. - Join-in at my expense? No way.

Unless you do not work, spend, live in Portugal I would now say it will cost you more than currency devaluation would have.

LisbonLaura

Really2 wrote: »

Simplistic? care to divuldge what is simplistic, and what moral hazards it avoids.

Or are we doing soundbites?

I was expecting that one. It's all been covered before on here, as you should well know; & if you don't then do your own donkey work.

Loopgames

Really2 wrote: »

I can't see how rates are artificially low, they are what they are and very similar to almost every other western economy.

Also the rates are not mirrored by mortgage rates so I do not see how they are a prop to house prices.

Only a few got the +0.49 trackers etc. Most are paying not far of the same when the base rate was 5.5% especially those that have fixed over the last 2-3 years.

So base rate may have stopped some defaults but they are not the reason why the base rate is where it is Perhaps a symptom, not a cause.

It would have to be something fairly major now to cause a next leg down IMHO.

The rates are artificially low in every country. Just because they are the same every where else doesn't mean they are not artificially low. Many western countries are suffering in a similar manner (it's a transfer of wealth shift from west to east).

The reason why it's artificial is because if demand is high for mortgages then interest rates go up to balance that demand - we're back to the supply and demand curve. But interest rates are not reflecting the demand and supply curve are they?

Interest rates are low today because now governments have huge debts and they are keeping them low to keep their debts manageable...hence it's artificial. They cannot sustain their debts unless the interest on them is near zero.

The situation is a lot different to the 1980s the more I think about it.

In 2008 the banks were propped up by governments but who will prop up the governments debts?

So that is why interest rates are 'artificial' and set as they are.

Also in 1980 interest rates were 15% today they are less than a third of that. I really don't think we are seeing the same scenerio today.

new_home_owner_3

LisbonLaura wrote: »

Ahh, the simplistic view, which neatly avoids a few moral hazards.

i agree totally with really 2, why would they raise interest rates, when it would cost the banks thousands and the government would have to bail the banks out aswell as rehouse people who have no houses to live in.

oh maybe theyll do this so britt and the clan can get a house on the cheap?

i think not, but you lot can keep on wishing.

Really2

Loopgames wrote: »

The rates are artificially low in every country. Just because they are the same every where else doesn't mean they are not artificially low. Many western countries are suffering in a similar manner (it's a transfer of wealth shift from west to east).

In your view all being on the same is artificially low, I would say parity. Who wants to be the strongest currency at the moment?
It a race to get things going, so why you believe rates are artificially is beyond me considering we have just gone through the biggest bust in nearly 100 years?

PS I do not think base rates are anything to do with the supply and demand curve for mortgages. They are a response to the economy and inflation.

Really2

LisbonLaura wrote: »

I was expecting that one. It's all been covered before on here, as you should well know; & if you don't then do your own donkey work.

It was a soundbite then.

new_home_owner_3

Loopgames wrote: »

The rates are artificially low in every country. Just because they are the same every where else doesn't mean they are not artificially low. Many western countries are suffering in a similar manner (it's a transfer of wealth shift from west to east).

The reason why it's artificial is because if demand is high for mortgages then interest rates go up to balance that demand - we're back to the supply and demand curve. But interest rates are not reflecting the demand and supply curve are they?

Interest rates are low today because now governments have huge debts and they are keeping them low to keep their debts manageable...hence it's artificial. They cannot sustain their debts unless the interest on them is near zero.

The situation is a lot different to the 1980s the more I think about it.

In 2008 the banks were propped up by governments but who will prop up the governments debts?

So that is why interest rates are 'artificial' and set as they are.

Also in 1980 interest rates were 15% today they are less than a third of that. I really don't think we are seeing the same scenerio today.

you try and get a mortgage now you will be paying between 4 and 5 percent maybe higher, over the past 10 years mortgage rates have always been around the 5 percent mark.

boe rate is very low just a shame the banks are not passing the historical low rate onto the customers, thats unless your on a tracker, but how many people are on these 0.49+ the base rate trackers, i dont know many.

Loopgames

new_home_owner wrote: »

you try and get a mortgage now you will be paying between 4 and 5 percent maybe higher, over the past 10 years mortgage rates have always been around the 5 percent mark.

boe rate is very low just a shame the banks are not passing the historical low rate onto the customers, thats unless your on a tracker, but how many people are on these 0.49+ the base rate trackers, i dont know many.

That's if your deposit is less than 40% LTV. High Street Interest rates are quite low for those with large deposits.