Interest Rates could hit 6% very soon!

Romani_Ite_Domum

Dead_Eye_Jones wrote: »

yeah but the "evidence" has pointed towards a crash for a long time. Many people made "informed" decisions a few years ago and held off buying or sold to rent on the basis that the market "had" to crash because thats what history says will happen after a boom.

How wrong they were! Its clear that many have lost out big time thanks to their "informed" decision. Tossing a coin doesnt seem like such a bad plan afterall, at least half the time these people would have been right!

I think, as many others have always said, if you are looking to purchase a home, and if you can "afford it", then theres nothing wrong with buying. If I were investing Id be looking for less risky places to put my money.

GL with the house hunt!

DEJ,

Agree with all you say.
The fact is, (as much as I don't like it) your property is probably the biggest investment you are going to make.

The reason that I am looking into this whole house market thing is that I am not selling my house right now. After 18 months and a price drop of 5% during that time, I am not selling. If you believe the media spin, houses have gone up by 12%? during that time. Was my house really overpriced by that much 18 months ago?

I found a buyer a year ago; I would have bought back into the property market. If I drop price now, I cannot afford to take the next step. My "informed" decision is whether to drop price and rent or stay put in a house that currently doesn’t suit our needs.

Not an easy choice to make. Similar to a FTB right now.

There is a sea change happening though. It has gone from "Prices will continue rising" to " Nobody knows what will happen but indicators are that they could well come down"

Thanks

Romani_Ite_Domum

Romani_Ite_Domum wrote: »

The question is, how did they let it get to this point in the first place?

Just found this. Looks like the MPC are going to start blaming their own members!

http://business.timesonline.co.uk/tol/business/economics/article1701419.ece

_From_the_article wrote:

Rachel Lomax, the deputy governor for monetary affairs and No 2 on the committee, voted against the two latest rate rises. Mr King suggested that individual MPC members should be held to account by the Select Committee for their own voting record.

free4440273

mystic_trev wrote: »

Swap rates

1y 6.12%
2y 6.04%
3y 6.00%
4y 5.95%
5y 5.89%

The markets have priced in a rate rise to 5.75% in July and a further rise to 6.00% in september.

With thanks to FF on TMF.

this site also offers good info. trouble is, wonder if the savings institutions already price in all of the above. let me rephrase that. have they already factored in, say, a .50 per cent increase. specifically here, halifax is offering 6.30% on its one year fixed rate bond. probably unlikely it will go any further even if the BofE were to raise rates?

stiffnuts69

sortofok wrote: »

All MIRAS did was put more money into the equation.

More money = rising prices

rising prices = BTL

BTL = rising debt levels

rising debt levels = falling affordability

falling affordability = dodgy financial practice

dodgy financial practice = more money

Welcome to the jungle

exactly right

Generali

free4440273 wrote: »

this site also offers good info. trouble is, wonder if the savings institutions already price in all of the above. let me rephrase that. have they already factored in, say, a .50 per cent increase. specifically here, halifax is offering 6.30% on its one year fixed rate bond. probably unlikely it will go any further even if the BofE were to raise rates?

If base rates rise but future expectations rise with them, then fixed rates will also rise. If rates rise but it's just seen as being a part of whatever is expected, fixed rates (for savers and borrowers) should remain unchanged.

As a caveat, banks always try to offer as little as is need to be just competitive.

free4440273

...i agree with all that also

mystic_trev

Generali wrote: »

If base rates rise but future expectations rise with them, then fixed rates will also rise.

There's been some talk from people in the City (mainly on TMF) that after todays BoE minutes, many Fixed rate deals are likely to be withdrawn in the next few days. I assume this is becuse rates in the money market are already increasing? Someone correct me if I'm wrong!

lisyloo

Sounds about right to me (although has to be regarded as speculation unless it came from someone that worked in a bank).

The money markets lend depending on future rate expectations and I would say that they've gone up since the publication of those minutes with a unanimous vote, so it sounds about right.

My sister was about to get a fixed rate and she's now on holiday so I think she might lose out.

lynzpower

mystic_trev wrote: »

There's been some talk from people in the City (mainly on TMF) that after todays BoE minutes, many Fixed rate deals are likely to be withdrawn in the next few days. I assume this is becuse rates in the money market are already increasing? Someone correct me if I'm wrong!

:eek: watch this space then if this happens

Hips or no hips, this is what is going to see the market come a- tumbling IMVHO

sortofok

lynzpower wrote: »

:eek: watch this space then if this happens

Hips or no hips, this is what is going to see the market come a- tumbling IMVHO

I'm glad you didn't use the C word lynz.

You'll get told off