Nationwide November +0.4% MOM +1.6% YOY

angrypirate

julieq wrote: »

I don't follow the logic. Why would the interest rate a buyer pays affect the willingness of a seller to sell? It's more likely that the sellers are waiting for a better offer. Unless you know about the seller and their financial status you can't draw a causal link.

And you can only infer anything at all about the 2 houses you offered on.

So case not proved really. I don't understand what you're getting at.

You have just proved my point. They ARE waiting for a better offer because they can AFFORD to wait. If rates were higher they wouldnt be able to afford to wait.

Go back a few years and very few people could afford to buy a new house before selling their current one. I am merely saying that right now people are doing that, can afford to do that and can afford to sit on their old property until they receive an offer they are happy with. When interest rates go up, fewer people will be able to afford this

Take my example, if they are owner occupiers but have moved on (I know for a fact these were owner occupied, not rented out) they have been able to afford to move properties with money tied up in one and yet buy a second (or rent). Either way, they can afford to leave their money tied up in an unused property and wait for a higher offer.

If rates were higher, money is more expensive. Leaving money tied up in a property that is vacant and is not going up in valve would be a very bad financial decision and anyone with an ounce of financial sense would be able to tell you that.

As the cost of money goes up, more people cannot afford to leave money tied up in assets that are not going up in value or do not provide an income. This is basic economics 101 and why most people who buy and sell properties are in a chain.

julieq

But in sample size 2 you haven't proved anything in the general case. You don't even know the sellers have a mortgage.

People with assets can choose the point at which they sell them. Leveraged assets will tend to be sold more quickly to recoup costs. You're frustrated that a seller isn't following the "distressed panic" script and accepting your offer, but that's their business, and you have to really wave your hands to make interest rates a major factor (people have moved out, paying mortgage and presumably rent or bridging loan, not bothered about costs racking up).

As a matter of interest, what was the offer relative to the asking price?

Cleaver

Graham_Devon wrote: »

7.75% was the norm for anyone on SVR.

Our fixed rate mortgage finished in 2008ish and went on to the SVR which was 7.8%. And that was with Coventry Building Society. We only stayed there for a month as we had equity and could get a new deal for 4% elsewhere. But if we couldn't we would have been stuck on 7.8%, which was the SVR norm at that time.

Graham_Devon

julieq wrote: »

Honestly Graham, you owe it to yourself and family to get some financial advice. This is outside any taking the p1ss, there is absolutely no reason why anyone should have been paying those rates during the period you were, and you've been very badly advised, if you received advice at all.

However if you want sympathy, you might start by not being quite so sarcastic at people who manage finances better than you.

And even at 7.75%, you could still make payments. Which is my contention exactly. No twisting of arguments here, it's the same argument: your reduction has been a windfall, not a lifesaver.

I don't want your sympathy Julie. I don't want anyones. I'm not sure why I need it, and secondly, not sure I've wrote anything which suggests I'm asking for it.

An SVR after coming off a fix in 2007/8, at 2% above base rate was completely and utterly normal. You are doing an injustice to youself by trying to make out it was anything other than normal.

If I wasn't on that SVR, I wouldn't have been able to follow rates down.

If I had taken a new fix, at around 6.5% at the time I was paying 7.75%, you would now be doing the very same, and suggesing I needed financial advice as I was stuck payign 6%. How do I know this? You tried to make out I was stuck on this sort of rate a page ago.

In other words, whatever the scenario, you will invent a scenario based on hindsight to suggest I haven't a bloody clue. I'm fully aware of the game!

julieq

Graham, you're on 3.5% and you could be on 2%. Following a poor rate down to another poor rate is not a major achievement.

You could apply today, and cut your payments basically in half. Give London and County a call.

If you're so wrapped up in notions of what a debt junkie does or doesn't do that you can't understand that paying lower rates is better than paying higher rates, then good luck to you, but please stop telling me I haven't got a clue about finances, when the evidence points the other way round.

I would rather like to get off the subject of your 7.75% rate, which is a bit like shooting at an ambulance, and back to the points, which you've rather ignored, i.e. you CAN afford your payments at 7.75%, and much of the inflation we've seen comes also from low rates, so it's swings and roundabouts. Plus your pay freeze has come from the economic downturn. You can't take one element in isolation.

Interest rates are not a major factor in sustaining prices. Supply shortfall is the dominant factor. If interest rates could be used to shore up a market, the US market would not have tanked. If you want to argue with me, can you please do it on those substantive points please?

ruggedtoast

Graham_Devon wrote: »

I don't want your sympathy Julie. I don't want anyones. I'm not sure why I need it, and secondly, not sure I've wrote anything which suggests I'm asking for it.

An SVR after coming off a fix in 2007/8, at 2% above base rate was completely and utterly normal. You are doing an injustice to youself by trying to make out it was anything other than normal.

If I wasn't on that SVR, I wouldn't have been able to follow rates down.

If I had taken a new fix, at around 6.5% at the time I was paying 7.75%, you would now be doing the very same, and suggesing I needed financial advice as I was stuck payign 6%. How do I know this? You tried to make out I was stuck on this sort of rate a page ago.

In other words, whatever the scenario, you will invent a scenario based on hindsight to suggest I haven't a bloody clue. I'm fully aware of the game!

How long were you on this penurious rate for Devs? Is that just what your fix reverted to or are you... still paying that? :eek:

wotsthat

Graham_Devon wrote: »

I don't want your sympathy Julie. I don't want anyones. I'm not sure why I need it, and secondly, not sure I've wrote anything which suggests I'm asking for it.

7.75%!

I've owned since 1993 and have bought two houses in that time both at LTV's that on here are now considered debt junkie levels.

I've never ever paid close to 7.75% but you are saying that you paid that at the end of a fix and the only alternative was 6.5%? That just can't be true - just a few minutes spent looking for a better rate would seem a better use of time rather than arguing on the internet.

FTBFun

SecondLegDownIsTheBigOne wrote: »

Agreed.

I payed £1.8K to leave a product in 2008. Since then the house that I sold has fallen in value by £15k, judging by current asking prices, I suspect the truth is a bigger fall than that. Meanwhile I have made that loss back and then some with interest from my savings, as well as subsidising my rent and spending some of that interest on luxuries and experiences too. Unfortunately the rate of inflation combined with low interest rates is meaning that I can't spend some of that interest in the economy anymore. At least that inflation is eating into house prices on top of the undeniable house price falls that are taking place.

This is the second leg down.

Like any of this actually happened, Mr "I have £1000 in silver"

julieq

wotsthat wrote: »

7.75%!

I've owned since 1993 and have bought two houses in that time both at LTV's that on here are now considered debt junkie levels.

I've never ever paid close to 7.75% but you are saying that you paid that at the end of a fix and the only alternative was 6.5%? That just can't be true - just a few minutes spent looking for a better rate would seem a better use of time rather than arguing on the internet.

I can guess one of two possible reasons. One being that he was worried about outlay upfront (i.e. penny wise, pound foolish), and the other being that the range of options was overwhelming, which causes many financially naive people to fold back on some sort of invented self justification similar to the "debt junkie" idea to prevent the "risk" of a mistake. I saw this when ISAs tanked in 2000 when the tech bubble blew, many people just decided the markets were rigged against the common man and resolved to dump their investments and never go near stocks and shares again.

The issue though is not hindsight, it's about taking sensible steps based on what is known. Cleaver took 4% fixed, and I would have done the same. In hindsight that's marginally worse than the 3.5% but as things were at the time it's the rational step. In fact with the right timing you could have been on a +0.19% tracker, but that's looking at a long shot bet when the outcome is known, and not many people were contrarian enough to be looking at trackers at that point. Good luck to anyone who got that, but it wasn't usual.

Most people coming up to the crisis were expecting rates to drift upwards and were setting lengthy fixes up. That's why rate reductions don't matter that much, because a great many people never saw them behind their fixed rates.

angrypirate

julieq wrote: »

But in sample size 2 you haven't proved anything in the general case. You don't even know the sellers have a mortgage.

People with assets can choose the point at which they sell them. Leveraged assets will tend to be sold more quickly to recoup costs. You're frustrated that a seller isn't following the "distressed panic" script and accepting your offer, but that's their business, and you have to really wave your hands to make interest rates a major factor (people have moved out, paying mortgage and presumably rent or bridging loan, not bothered about costs racking up).

As a matter of interest, what was the offer relative to the asking price?

You really dont have any financial sense. Right now people arent worried about racking these costs (ie second mortgage, bridging loans) cos the rates ARE so low. If the interest rates were higher people WOULD be bothered.

I am not frustrated - im actually relieved that the offers on one of the property was rejected because we decided in the end we rather not have the property (we were in fact going to up our offer 5k but decided against it). That was 2 months ago and the property is still on the market (incidentally it has been on since July). We offered 13% below the asking price on the basis that on the neighbouring terrace, a near identical house needing a similar amount of work (ie a lot) sold for that price back in May.

Properties in this area requiring work are currently on the market at a price that is literally the cost of a done up property minus the apparent cost of doing the work - ie there is no margin for the unseen and one estate agent has even said to me that at the current marketed price of this property, f you were to do the work yourself to a high standard you'd probably end up spending more.

You say a sample size of 2 - thats only 2 we've made offers on. We have seen about 15 out of about 20 that are "no chain" and about 4 or 5 of these are vacant possession. In my view thats a significant percentage.