Will there really be a crash?

Filo25

BoE held rates unchanged today in a unanimous vote, really not likely to see any further changes now until Brexit is resolved unless we see some surprising economic data.

Pretty much reiterated their forward guidance

Over the past few years, our economy has needed interest rates to stay very low as we recovered from the global financial crisis.

But things have been changing. Our economy now needs a little less support because it is growing a little faster than it has capacity to and inflation is above our 2% target. To ensure a sustainable return of inflation to the target, we need to keep the economy growing at around its speed limit.

That is why we raised the official interest rate from 0.5% to 0.75% in August.

After raising interest rates in August, this month we have left them unchanged. If the economy performs as we expect, we think we will need to raise interest rates a bit more over the next few years.

We expect any rises in interest rates to happen at a gradual pace and to a limited extent. Interest rates are likely to remain substantially lower than a decade ago.

lisyloo

Thrugelmir wrote: »

People have responded to letters sent out. The lenders with poor underwriting standards in the boom years are well known. The old mortgage books are slowly whittling down. Complaints of being mortgage prisoners is an indication of potential issues in the future as well. With interest rates at rock bottom levels there's been an opportunity for people to tackle the issue even if only just in part.

I really don't think this is a massive issue because
a) people have been warned and some will make arrangements
b) arrangements are being made to extend. Now this might not be ideal but it does avoid a timebomb
c) the complaints of being mortgage prisoners are being dealt with
d) there is forebearance on debt in place so if people are making efforts they are likely to be accomodated and not repossed.



Yes there will be a small minority who get into distress (there always are) but usually coupled with some other event like job loss, ill health divorce, death.


BTW - my mortgage was with First Direct so not with a dodgy backstreet lender

MaxiRobriguez

Filo25 wrote: »

BoE held rates unchanged today in a unanimous vote, really not likely to see any further changes now until Brexit is resolved unless we see some surprising economic data.

Pretty much reiterated their forward guidance

Over the past few years, our economy has needed interest rates to stay very low as we recovered from the global financial crisis.

But things have been changing. Our economy now needs a little less support because it is growing a little faster than it has capacity to and inflation is above our 2% target. To ensure a sustainable return of inflation to the target, we need to keep the economy growing at around its speed limit.

That is why we raised the official interest rate from 0.5% to 0.75% in August.

After raising interest rates in August, this month we have left them unchanged. If the economy performs as we expect, we think we will need to raise interest rates a bit more over the next few years.

We expect any rises in interest rates to happen at a gradual pace and to a limited extent. Interest rates are likely to remain substantially lower than a decade ago.

The big thing to take away from the BoE announcement is that they suggested interest rates may RISE rather than be cut in the event of a no-deal messy Brexit if inflationary pressures outweigh reduction in economic activity.

I suspected this would be the case, and worth noting for anyone who was tactically banking on a few percentage point cut back to 0.25 in that scenario.

Filo25

MaxiRobriguez wrote: »

The big thing to take away from the BoE announcement is that they suggested interest rates may RISE rather than be cut in the event of a no-deal messy Brexit if inflationary pressures outweigh reduction in economic activity.

I suspected this would be the case, and worth noting for anyone who was tactically banking on a few percentage point cut back to 0.25 in that scenario.

I think it is a possible scenario but not the most likely one, there is a lot of policy uncertainty about a hard Brexit unforutnately, hard to predict how much Sterling would sell off, how much would short term supply restriction lead to inflation and how long lived would that inflation be, BoE would clearly want to avoid raising rates into weakening demand if they could avoid it, but you are correct there may be situations where it could be required.

grumpysod

triathlon wrote: »

Look, there are people, usually lefty liberal types, who like to pretend there is a certain type of world and there are people who actually are awake and are living in the real world. I have had enough tenants to know in general what they are like, going through life living in suitcases, never fitting in, so so much more.
Another example away from rented talk, Where I once lived there were a number of ethnic communities for example, all the Guardian reader types pretending that we all lived in the wonderful rainbow nation, all brothers and sisters etc. Yet not one of these people lived anywhere near these communities and never would, some people just cannot be honest with themselves.
Tenants in my eyes are fine as long as they are not late with the rent, that's where our relationship ends.

Read a couple of your posts and just stopped, I would like to hope that you are an individual case, but sadly I know through experience that is not the case.
How people like you are allowed to home families just sickens me, and I know worse than you even. You have no empathy, decency or just a little respect even, your tenants are fodder in your eyes.
Thank goodness I was able to buy in the 1980's and 1990's when working young people who aspired to buy their own home found it far easier than today