Interest rate rise likely this year

Rinoa

Leading housebuilders shares down around 4% this morning as the market assumes fewer houses will be built.

That should keep prices moving upwards.

And we boomers will benefit from higher interest on our savings.

Good news all round. [FONT=&quot] [/FONT]

princeofpounds

... but to be fair, many may not even realise interest rates do actually move!

I thought they always went down? Just like house prices always go up?

Generali

wotsthat wrote: »

There has been media chatter about rate rises for months. I've seen Carney's speech today on Bloomberg TV, the BBC and ITV. It's covered in every single newspaper and will be mentioned on every Radio news bulletin.

Anyone that by now doesn't realise interest rates can go up probably doesn't have a mortgage unless their carer helped them complete the application form.

Back in the boom years I don't think that literacy was a requirement to getting a loan.

There are stories from the US about bank staff going around half-way houses with pre-approved credit card forms. Those were great days to be working for a bank, gotta be honest. Money flowed like water. It's bloody boring now.

wymondham

wotsthat wrote: »

There has been media chatter about rate rises for months. I've seen Carney's speech today on Bloomberg TV, the BBC and ITV. It's covered in every single newspaper and will be mentioned on every Radio news bulletin.

Anyone that by now doesn't realise interest rates can go up probably doesn't have a mortgage unless their carer helped them complete the application form.

.. yet despite this ... when rates go up we will see many articles in the papers about people pushed over the edge, people claiming how 'scumbag' banks have put their charges up ... just wait!

ruggedtoast

Interest rate... rises?

I am not really prepared for one of those.

Bantex_2

Generali wrote: »

Back in the boom years I don't think that literacy was a requirement to getting a loan.

There are stories from the US about bank staff going around half-way houses with pre-approved credit card forms. Those were great days to be working for a bank, gotta be honest. Money flowed like water. It's bloody boring now.

Was handy when you could bundle up a load of toxic loans into some sort of derivative and the agencies would give it an AAA rating so you could flog it to someone else.

ruggedtoast

Over on the forum hpc.co.uk the response to this has been muted. I would have thought they would have been cheering like starving war time Londoners surrounding a bus full of bubble gum toting American GIs. But actually they are not.

the_flying_pig

Rinoa wrote: »

Leading housebuilders shares down around 4% this morning as the market assumes fewer houses will be built.

That should keep prices moving upwards.[FONT=&quot].. [/FONT]

higher interest rates tend to push HPs up?

[as i daresay you're aware] that's very much a minority view.

Rinoa

the_flying_pig wrote: »

higher interest rates tend to push HPs up?

[as i daresay you're aware] that's very much a minority view.

Depends how high. Back in 2007 base rate was 5.75 and average house prices were higher than now.

Putting base rates up to say 3% over the next 3 years isn't going to have much effect. TBH I don't think rate rises will have much effect on house building either, but unless they start building 500,000 every year, house prices will continue to rise.

wotsthat

wymondham wrote: »

.. yet despite this ... when rates go up we will see many articles in the papers about people pushed over the edge, people claiming how 'scumbag' banks have put their charges up ... just wait!

Yesterday the CML released latest FTB data - average mortgage £121.5K based on a 3.42 multiple and the mortgage (interest and capital) taking up 19.4% of gross pay. i.e. it's possible to calculate what they earn, how much their mortgage payments are and the interest rate they're paying. If they've just started a 25 year repayment mortgage it turns out their interest rate is exactly 3%.

A full 1% increase in their mortgage rate will cost them an extra £63/ month and take the ratio of gross pay used from 19.4% to 21.5%.

A 0.25% increase in rates in December will cost less than an Indian takeaway.

I absolutely agree there will be a media feeding frenzy but all the journalists will lead on the question 'how do you feel about a rate increase' rather than 'what will the effect be of a £15 increase in your mortgage?'.