Home Ownership down – Cost of Buying Up

nollag2006

Graham_Devon wrote: »

Ok, so you seem to believe we will see increases in house prices to go hand in hand with increases in the cost of buying the house?

I.e house prices will rise at the same time mortgage costs rise? I'd ask where the money is going to come from, but there would be little point...you seem to now suggest base rates will rise, house prices will rise, but mortgage rates will stay static. Good lord.

Hmmm... you really aren't getting this, are you? I can see why you still live with mum and dad now.

Lets take it one step at a time for you, as you seem to be struggling...

BOE interest rates will only rise when the economic recovery is well and truly underway.

Even if the UK economic picked up steam over the next six months, the BOE is still likely to ride out a bit of inflation (including property inflation) before BOE rates rise. This will not be tomorrow or next week, as you suggest but is likely to be at least a year away, according to long term interest rates.

The spread between mortgage rates and BOE rates are still at historical highs due to the hangover from the credit squeeze. Personally, I was on a BOE tracker at Base rate - 0.51% when the crunch began so was on negative interest rates for a while.

Those products have disappeared from the market. Once the recovery picks up, and BOE rates rise these products will re-emerge due to competition between mortgage providers thereby cushioning any BOE rate rise.

Is that really so difficult to comprehend.

Good lord.

Graham_Devon wrote: »

But it may not be quite so good tommorow.

I'm going to take a wild guess here, but the property market is unlikely to move much over the next 24 hours.

Graham_Devon

nollag2006 wrote: »

Hmmm... you really aren't getting this, are you? I can see why you still live with mum and dad now.

I don't live with my mum and dad, but nice attempt at an insult as I'm questioning you.

Lets take it one step at a time for you, as you seem to be struggling...

BOE interest rates will only rise when the economic recovery is well and truly underway.

Already been over this above. It's just wrong. What you are describing is the best possible outcome, AND suggesting theres a recovery underway, which is basically head in sand stuff.

Even if the UK economic picked up steam over the next six months, the BOE is still likely to ride out a bit of inflation (including property inflation) before BOE rates rise. This will not be tomorrow or next week, as you suggest but is likely to be at least a year away, according to long term interest rates.

You appear to struggle to grasp the use of next week and tommorow. It doesn't literally mean tommorow, and I'm sure you are aware of this. So I can only take it you are creating confusion and argument over the use of "tommorow". In discussion, in simple terms, it refers to the future.

The spread between mortgage rates and BOE rates are still at historical highs due to the hangover from the credit squeeze. Personally, I was on a BOE tracker at Base rate - 0.51% when the crunch began so was on negative interest rates for a while.

Those products have disappeared from the market. Once the recovery picks up, and BOE rates rise these products will re-emerge due to competition between mortgage providers thereby cushioning any BOE rate rise.

Why? Tell me why you believe the above? If what you believe was true, mortgage rates would be closer to base rates now. They are not. So why do you believe, with absolutely no evidence, that they will be move closer when base rates rise? Especially given the amount of write off's banks are having to make, and capital requirements that have to abide by.

So if you can tell me why the above would happen, when they need money, I'd be grateful.

Is that really so difficult to comprehend.

Good lord

I'm going to take a wild guess here, but the property market is unlikely to move much over the next 24 hours.

It is, as you won't explain the background to your theories. You just want to state them and then move on to insults (as perf first paragraph) if your theory is questioned.

I like the use of the 24 hour thing again and the purposeful confusion over tommorow to get a sly dig in. But actually answering my questions would have been more beneficial.

geneer

nollag2006 wrote: »

Hmmm... you really aren't getting this, are you? I can see why you still live with mum and dad now.

:rotfl:Nice. Bull throws in the towel from the start. Its almost as if he knew GDs smackdown was coming.
Seeing it coming eh. Must be a new feeling.

geneer

Graham_Devon wrote: »

I like the use of the 24 hour thing again and the purposeful confusion over tommorow to get a sly dig in. But actually answering my questions would have been more beneficial.

So he kicked off with an ad hominem and capped it off with deliberate misinterpretation. Classic stuff!

Is it just me, or are a lot of the post crash bull arguments focused on reinventing meanings and definitions in transparently laughable attempts to suit themsevles.

HAMISH_MCTAVISH

Graham_Devon wrote: »

If what you believe was true, mortgage rates would be closer to base rates now. They are not. So why do you believe, with absolutely no evidence, that they will be move closer when base rates rise?.

Hmmmm, quite possibly because the Governor of the Bank of England has already stated that's when interest rates will rise.

Mervyn King-- 1st March 2011

"The point that I would make that ought to give us some comfort I think is this: one of the reasons why we cut bank rate to such a low level was because we knew that the banks would still be charging healthy positive rates to borrowers because they could not borrow at 0.5%. The banks were paying a hefty premium on bank rate to get hold of funds, so mortgage rates and borrowing rates in general did not come down anywhere near as fast as bank rate came down.

When we come to put bank rate up, at a point when we are wanting to move bank rate back to more normal levels, that is surely likely to be at a point when the banking system is in a healthier condition and can borrow at rates closer to bank rate, so that the increase in effective borrowing rates will not be anywhere near as big as the actual increase in bank rate."

HAMISH_MCTAVISH

Now lets see if the evidence also suggests that rate rises will only happen when we have a strengthening economy and falling unemployment. Exactly as has been mentioned by numerous posters in numerous threads.

Ah yes, here we are.

--Mervyn King, June 2011

"The reason we would raise interest rates would be in the context of a much stronger economy with unemployment falling rather than rising.

It should also be the case that the interest rates that borrowers face should not rise as fast as the rise in bank rate.

"Along with the path of an increase in the bank rate -- which inevitably will come from where we are now back to more normal levels -- you would expect that to be accompanied by a process in which the spread between the bank rate and the rates banks charge would undoubtedly narrow."

geneer

HAMISH_MCTAVISH wrote: »

Now lets see if the evidence also suggests that rate rises will only happen when we have a strengthening economy and falling unemployment. Exactly as has been mentioned by numerous posters in numerous threads.

Ah yes, here we are.

--Mervyn King, June 2011

"The reason we would raise interest rates would be in the context of a much stronger economy with unemployment falling rather than rising.

It should also be the case that the interest rates that borrowers face should not rise as fast as the rise in bank rate.

"Along with the path of an increase in the bank rate -- which inevitably will come from where we are now back to more normal levels -- you would expect that to be accompanied by a process in which the spread between the bank rate and the rates banks charge would undoubtedly narrow."

Buy merv also warned us in 2004 that a house price correction was quite possible.

House prices may fall, says King
House prices may start to fall, the governor of the Bank of England has warned, saying people should be wary of taking the plunge into buying property.

Mervyn King said prices were now "well above what most people would regard as sustainable in the longer term". He also gave a clear indication that there may be further interest rate rises on the horizon

So naturally, despite the fact that a crash was indeed inevitable, by your own code of honour, you're now obliged to rampage across multiple forums slagging merv arbitrarily and stating how everything he ever said and ever will say is completely discredited.

Aren't you?

vivatifosi

ruggedtoast wrote: »

Hmm, you are very active with these threads today. Like a furtive squirrel, eager to present your best nuts to an attractive mate.

:rotfl::rotfl::rotfl:

That has left a very strange mental picture in my mind. One that I'll struggle to get rid of for the rest of the day.

HAMISH_MCTAVISH

Home Ownership down – Cost of Buying Up

“Home ownership is increasingly becoming the preserve of the wealthy”

Exactly as predicted.

The inevitable consequences of a house price crash and mortgage rationing leading to a worsening housing shortage as house building falls to the lowest levels in over a century.

IveSeenTheLight

ruggedtoast wrote: »

Hmm, you are very active with these threads today.

Hmmmm, I started two threads if I recall.
The first two threads I've started in months, possibly even this year.

Do you not like the content or something?