Are we expecting BOE to remain at 4.75% on 8th February 2025?

ReadySteadyPop

MeteredOut said:

ReadySteadyPop said:

lojo1000 said:

The issue for those with property portfolios is the illiquidity (unlike some other assets!).

By the time the fall in price convinces ppl they need to sell before negative equity kicks in, they cannot line up a buyer at the price they had in their head.

Recency bias on the way down is where property owners suffer. Whereas on the way up they suffer from locality bias. As in, "the house down the street sold for 300k so this one must be 310k!".

I think inflation continues to climb near term but as soon as the doom and gloom comes back to main street, CBs will cut, cut, cut and likely need even more QE and then we're really off to the races - hyperinflation and asset prices through the roof. Unemployment is the only issue there. What are you forced to sell when unemployed?

In the 80`s property crash people were offloading property to pay other debts, I could am really really really really hoping see a lot of BTL/AirBnB at deep discounts if the trade war kicks off next year as expected.

Fixed that for you.

Large numbers of the population are also really really really hoping, don`t you see that yet? AirBnB ruins communities and there are millions of people back in their old bedroom at home just waiting for BTL to throw in the towel.

MeteredOut

ReadySteadyPop said:

MeteredOut said:

ReadySteadyPop said:

lojo1000 said:

The issue for those with property portfolios is the illiquidity (unlike some other assets!).

By the time the fall in price convinces ppl they need to sell before negative equity kicks in, they cannot line up a buyer at the price they had in their head.

Recency bias on the way down is where property owners suffer. Whereas on the way up they suffer from locality bias. As in, "the house down the street sold for 300k so this one must be 310k!".

I think inflation continues to climb near term but as soon as the doom and gloom comes back to main street, CBs will cut, cut, cut and likely need even more QE and then we're really off to the races - hyperinflation and asset prices through the roof. Unemployment is the only issue there. What are you forced to sell when unemployed?

In the 80`s property crash people were offloading property to pay other debts, I could am really really really really hoping see a lot of BTL/AirBnB at deep discounts if the trade war kicks off next year as expected.

Fixed that for you.

Large numbers of the population are also really really really hoping, don`t you see that yet? AirBnB ruins communities and there are millions of people back in their old bedroom at home just waiting for BTL to throw in the towel.

Of course I see that; it is blatantly obvious. But your comment was not on people's hopes, it was that there could be deep discounts.

You don't seem to be able to disassociate yourself from what you want to happen and what is actually happening.

lojo1000

What is happening is CBs have been on a rate cutting cycle for a year now and all yields have done since is go up.

That is either due to a strong outlook for growth or inflation. 

If you think the outlook for growth for the UK economy is strong with productivity growth at zero then that's okay.

But I would like to hear the basis for that belief.

Hoenir

What is happening is CBs have been on a rate cutting cycle for a year now and all yields have done since is go up.

That is either due to a strong outlook for growth or inflation. 

The chart suggests that normality is returning. The abnormality was the QE era. 

lojo1000

Hoenir said:

What is happening is CBs have been on a rate cutting cycle for a year now and all yields have done since is go up.

That is either due to a strong outlook for growth or inflation. 

The chart suggests that normality is returning. The abnormality was the QE era. 

I think CBs will be forced to go back to QE within in a few years when they realise cutting rates no longer stimulates the economy.

Maka344

lojo1000 said:

Hoenir said:

What is happening is CBs have been on a rate cutting cycle for a year now and all yields have done since is go up.

That is either due to a strong outlook for growth or inflation. 

The chart suggests that normality is returning. The abnormality was the QE era. 

I think CBs will be forced to go back to QE within in a few years when they realise cutting rates no longer stimulates the economy.

Where do you see the base rate in 2027+? 

lojo1000

Maka344 said:

lojo1000 said:

Hoenir said:

What is happening is CBs have been on a rate cutting cycle for a year now and all yields have done since is go up.

That is either due to a strong outlook for growth or inflation. 

The chart suggests that normality is returning. The abnormality was the QE era. 

I think CBs will be forced to go back to QE within in a few years when they realise cutting rates no longer stimulates the economy.

Where do you see the base rate in 2027+? 

1. No idea as so much can happen in 2-3 years.
2. I think rates will still be on a downward path by 2027.
3. At some point govts and CBs will cause inflation as it will be the least worse option to them and rates will later need to go up materially. 
4. Don't know when this will be.

ReadySteadyPop

lojo1000 said:

Maka344 said:

lojo1000 said:

Hoenir said:

What is happening is CBs have been on a rate cutting cycle for a year now and all yields have done since is go up.

That is either due to a strong outlook for growth or inflation. 

The chart suggests that normality is returning. The abnormality was the QE era. 

I think CBs will be forced to go back to QE within in a few years when they realise cutting rates no longer stimulates the economy.

Where do you see the base rate in 2027+? 

1. No idea as so much can happen in 2-3 years.
2. I think rates will still be on a downward path by 2027.
3. At some point govts and CBs will cause inflation as it will be the least worse option to them and rates will later need to go up materially. 
4. Don't know when this will be.

Not like they tried to do in 2008, and finally succeeded in doing after Covid, that was co-ordinated across the globe, can`t see that happening again to be honest, things are a lot more uncontrolled now with CB`s working for their own national interests and politics moving away from globalism.

ReadySteadyPop

Maka344 said:

lojo1000 said:

Hoenir said:

What is happening is CBs have been on a rate cutting cycle for a year now and all yields have done since is go up.

That is either due to a strong outlook for growth or inflation. 

The chart suggests that normality is returning. The abnormality was the QE era. 

I think CBs will be forced to go back to QE within in a few years when they realise cutting rates no longer stimulates the economy.

Where do you see the base rate in 2027+? 

7%, which would be less than half the levels it has reached in the past.

ReadySteadyPop

MeteredOut said:

ReadySteadyPop said:

MeteredOut said:

ReadySteadyPop said:

lojo1000 said:

The issue for those with property portfolios is the illiquidity (unlike some other assets!).

By the time the fall in price convinces ppl they need to sell before negative equity kicks in, they cannot line up a buyer at the price they had in their head.

Recency bias on the way down is where property owners suffer. Whereas on the way up they suffer from locality bias. As in, "the house down the street sold for 300k so this one must be 310k!".

I think inflation continues to climb near term but as soon as the doom and gloom comes back to main street, CBs will cut, cut, cut and likely need even more QE and then we're really off to the races - hyperinflation and asset prices through the roof. Unemployment is the only issue there. What are you forced to sell when unemployed?

In the 80`s property crash people were offloading property to pay other debts, I could am really really really really hoping see a lot of BTL/AirBnB at deep discounts if the trade war kicks off next year as expected.

Fixed that for you.

Large numbers of the population are also really really really hoping, don`t you see that yet? AirBnB ruins communities and there are millions of people back in their old bedroom at home just waiting for BTL to throw in the towel.

Of course I see that; it is blatantly obvious. But your comment was not on people's hopes, it was that there could be deep discounts.

You don't seem to be able to disassociate yourself from what you want to happen and what is actually happening.

As other posters have pointed out what is actually happening is that bond yields are rising, I predict that the U.S Ten Year is going to go through 5% soon, what that means is that anyone who levered up for a BTL or AirBnB, or a second home or even their primary residence is in trouble, as I pointed out in my original post.