FSA advisers urge delay to mortgage reform and more 'flexible' lending

shortchanged_2

OK, which people are currently most exposed to tough ecomonic conditions?

I would hazard a guess and say it is the people who bought at the peak of the market or there abouts because they are the ones with the biggest capital debt.

These are the people who were sold mortgages that were maybe 5X income with very small or no deposits BUT at the time they took these products out they were affordable because the banks let them be affordable. Hindsight is a wonderful thing.

It doesn't take a rocket scientist to work out these are likely to be the ones more exposed to financial difficulty because they took out a bigger debt due to higher house prices in the first place.

Am I wrong?

DervProf

shortchanged wrote: »

Am I wrong?

I don't know for sure, but I'd say your reasoning makes sense.

shortchanged_2

Another thing is, who are the ones on the forum who cheer the most when interest rates are kept low?

RenovationMan is one example because he has taken out a huge debt and would quite possibly be fooked if interest rates went up.

DervProf

shortchanged wrote: »

Another thing is, who are the ones on the forum who cheer the most when interest rates are kept low?

RennovationMan is one example because he has taken out a huge debt and would quite possibly be fooked if interest rates went up.

And whatever you do, don't dare to suggest anything that might possibly go wrong with his "plan".

Really2

shortchanged wrote: »

Another thing is, who are the ones on the forum who cheer the most when interest rates are kept low?

RenovationMan is one example because he has taken out a huge debt and would quite possibly be fooked if interest rates went up.

A great point, but who will be the ones who cheer when they go up and why will they cheer.
Sounds like they may be just as guilty of wanting their personal interest to work out?

DervProf

Really2 wrote: »

A great point, but who will be the ones who cheer when they go up and why will they cheer.
Sounds like they may be just as guilty of wanting their personal interest to work out?

I'll cheer, a little.

I wanted rate to be increased (slightly) to calm down the "boom" of the mid 00's. I also wanted the FSA to look more closely at the likes of Northern Rock. I smelt a rat, and suspected that there would be trouble ahead.

The reason I want rates to rise now is not out of self interest, it is out of interest in the future of our economy. History has shown that the path of least resistance is often the path to ruin.

Turnbull2000

Why on earth are people even discussing the potential of rate rises in respect of the housing market? The BoE will keep rates ultra-low for many years yet. I'd be surprised if we have any rise this year alone.

dopester

Turnbull2000 wrote: »

The BoE will keep rates ultra-low for many years yet. I'd be surprised if we have any rise this year alone.

Only if it maintains the approval of its policy by the markets, who I understand are looking more critically at the UK's financial position.

If markets don't approve or have confidence in low rates, or don't like prospect of new rounds of QE impacting on them, they can sell the pound, sell gilts, with money flowing elsewhere, causing real trading problems for the UK.

1992.
http://www.guardian.co.uk/business/1992/sep/17/emu.theeuro

shortchanged_2

Really2 wrote: »

A great point, but who will be the ones who cheer when they go up and why will they cheer.
Sounds like they may be just as guilty of wanting their personal interest to work out?

To be honest Really2, if you are referring to me I actually benefit more from low interest rates as I have now gone onto a low rate tracker. I do not have any great deal of savings, certainly not enough that a rise in interest rates would make much difference to.

As Dervprof stated the interest rate issue is more about the good of the UK economy as a whole because low interest rates indicate a weak economy plus people get used to having such a low rate and start seeing it as the norm.

I am not saying there needs to be a rise in interest rates just yet because the economy is so fragile, we may well even go back into recession. But there certainly seems to be many people who are wishing for low interest rates to remain otherwise their mortgages would start to become a problem and my evidence for this is that there is a huge proportion of the UK mortgages that are currently on variable rate deals.

Graham_Devon

Really2 wrote: »

A great point, but who will be the ones who cheer when they go up and why will they cheer.
Sounds like they may be just as guilty of wanting their personal interest to work out?

I won't be "cheering".

it will cost me on my mortgage. It's not self interest.