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

BikingBud

RelievedSheff said:

BikingBud said:

RelievedSheff said:

Aberdeenangarse said:

RelievedSheff said:

Aberdeenangarse said:

lojo1000 said:

Aberdeenangarse said:

lojo1000 said:

Here begin the cries for help for those who overcommitted on their mortgage.

https://www.theguardian.com/business/live/2023/jun/16/mortgage-rates-uk-government-urged-to-provide-emergency-help-costs-rising-nationwide-liberal-democrats-business-live?filterKeyEvents=false&page=with:block-648bfde38f08abfd8db3db78#block-648bfde38f08abfd8db3db78

It was only a question of time. I doubt they’ll be much the Government can do to prop up the housing market before the next General Election, and bringing MIRAS back is a no no. Frightening to see repossessions up 50% in the last quarter! I quite like the LibDems idea for targeted help to stop people losing their homes. Sensible idea.

Serious question, to draw a comparison. Would you also support financial help for renters who fall behind on their rent because the rent went up? 

Difficult question I really can’t answer. I actually own two BTL’s and the rent the tenants are paying was already below the market rate and is now well below. Probably by about 25%! 

So raise the rents at the next opportunity.

They are long term decent tenants and I somehow doubt either of them could afford to pay the going rate and I’m certainly not going to throw them out on the streets! The last increase, a year ago, was 5% which I thought fair. The properties are mortgage free and just extra money to me, ensuring a well off retirement!

Not sure how that becomes your problem.

7 words that sum up the worst of society 

Why would you sell (or rent) someone something knowing full well you could get more for that same product (or property) from someone else?

Because it is a broader long term view, not typical short-termism, fuelled by greed that looks after only your interest rather than establishing and sustaining a mutually beneficial business agreement. 

Let to someone on an apparent rent increase, find they cannot afford the increase and then your problems really start. Best case you get them out swiftly, worst case you spend lots of time effort and emotional energy trying to gain access to a house that has been trashed all because you wanted more.

Meanwhile understanding the value of long-standing tenants who care for your property, even undertaking minor repairs themselves as they gain the immediate benefit should not be underestimated. You look after them they look after your house

We are where we are with property prices because everybody believes they are worth more, always. When in fact we are just screwing ourselves and our children and grandchildren over, all because some want to exploit others.

Sarah1Mitty2

BikingBud said:

RelievedSheff said:

BikingBud said:

RelievedSheff said:

Aberdeenangarse said:

RelievedSheff said:

Aberdeenangarse said:

lojo1000 said:

Aberdeenangarse said:

lojo1000 said:

Here begin the cries for help for those who overcommitted on their mortgage.

https://www.theguardian.com/business/live/2023/jun/16/mortgage-rates-uk-government-urged-to-provide-emergency-help-costs-rising-nationwide-liberal-democrats-business-live?filterKeyEvents=false&page=with:block-648bfde38f08abfd8db3db78#block-648bfde38f08abfd8db3db78

It was only a question of time. I doubt they’ll be much the Government can do to prop up the housing market before the next General Election, and bringing MIRAS back is a no no. Frightening to see repossessions up 50% in the last quarter! I quite like the LibDems idea for targeted help to stop people losing their homes. Sensible idea.

Serious question, to draw a comparison. Would you also support financial help for renters who fall behind on their rent because the rent went up? 

Difficult question I really can’t answer. I actually own two BTL’s and the rent the tenants are paying was already below the market rate and is now well below. Probably by about 25%! 

So raise the rents at the next opportunity.

They are long term decent tenants and I somehow doubt either of them could afford to pay the going rate and I’m certainly not going to throw them out on the streets! The last increase, a year ago, was 5% which I thought fair. The properties are mortgage free and just extra money to me, ensuring a well off retirement!

Not sure how that becomes your problem.

7 words that sum up the worst of society 

Why would you sell (or rent) someone something knowing full well you could get more for that same product (or property) from someone else?

Because it is a broader long term view, not typical short-termism, fuelled by greed that looks after only your interest rather than establishing and sustaining a mutually beneficial business agreement. 

Let to someone on an apparent rent increase, find they cannot afford the increase and then your problems really start. Best case you get them out swiftly, worst case you spend lots of time effort and emotional energy trying to gain access to a house that has been trashed all because you wanted more.

Meanwhile understanding the value of long-standing tenants who care for your property, even undertaking minor repairs themselves as they gain the immediate benefit should not be underestimated. You look after them they look after your house

We are where we are with property prices because everybody believes they are worth more, always. When in fact we are just screwing ourselves and our children and grandchildren over, all because some want to exploit others.

Smart landlords know this, I doubt the poster you responded to has had much experience of being an actual landlord.

Sarah1Mitty2

TheAble said:

Altior said:

There's a strange delusion with the property market, where people seem to want uber cheap borrowing forever, easy access to the market for first time/young buyers, a property market correction, stable property prices and no repossessions.

Repossessions must be possible, the cost of borrowing must be able to go up, it must be quite tough to access the market.

It's unfortunate if an individual or family is on the wrong side of one of those variables, but that is life. Big financial choices have risk attached to them. There has to be a moral hazard. You can't go to the limit to get a big house, borrow £40K to furnish it, get a £30K Audi on pcp, and expect other people to pick up the tab if interest rates go up. 

Also completely agree. Though I suspect unfortunately this is where we're heading - as soon as the repos and the squealing starts, the government will step in. And those who were sensible and frugal and put money aside to protect themselves against interest rate rises will get nothing, whereas the feckless will be made whole. It seems to be the modern way, sadly.

As I pointed out yesterday this can`t happen as rates would go even higher, it looks like they are letting the public know this which is a good thing.

https://news.sky.com/story/risky-for-government-to-intervene-as-mortgage-costs-surge-ex-bank-of-england-deputy-warns-12904753

TheAble

Sarah1Mitty2 said:

TheAble said:

Altior said:

There's a strange delusion with the property market, where people seem to want uber cheap borrowing forever, easy access to the market for first time/young buyers, a property market correction, stable property prices and no repossessions.

Repossessions must be possible, the cost of borrowing must be able to go up, it must be quite tough to access the market.

It's unfortunate if an individual or family is on the wrong side of one of those variables, but that is life. Big financial choices have risk attached to them. There has to be a moral hazard. You can't go to the limit to get a big house, borrow £40K to furnish it, get a £30K Audi on pcp, and expect other people to pick up the tab if interest rates go up. 

Also completely agree. Though I suspect unfortunately this is where we're heading - as soon as the repos and the squealing starts, the government will step in. And those who were sensible and frugal and put money aside to protect themselves against interest rate rises will get nothing, whereas the feckless will be made whole. It seems to be the modern way, sadly.

As I pointed out yesterday this can`t happen as rates would go even higher, it looks like they are letting the public know this which is a good thing.

https://news.sky.com/story/risky-for-government-to-intervene-as-mortgage-costs-surge-ex-bank-of-england-deputy-warns-12904753

To be clear, I'm not saying it should happen, I hope it doesn't happen, just that I suspect it might. The government has form in this regard e.g. energy bills, furlough, forbearance for renters and mortgage holders during furlough. The current problems with interest rates and inflation are in no small part down to previous policies such as these. Plus there's a general election around the corner and voters to placate.

Mortgage help 'under review', says Michael Gove

https://www.bbc.co.uk/news/business-65922072

Time will tell...

Sarah1Mitty2

TheAble said:

Sarah1Mitty2 said:

TheAble said:

Altior said:

There's a strange delusion with the property market, where people seem to want uber cheap borrowing forever, easy access to the market for first time/young buyers, a property market correction, stable property prices and no repossessions.

Repossessions must be possible, the cost of borrowing must be able to go up, it must be quite tough to access the market.

It's unfortunate if an individual or family is on the wrong side of one of those variables, but that is life. Big financial choices have risk attached to them. There has to be a moral hazard. You can't go to the limit to get a big house, borrow £40K to furnish it, get a £30K Audi on pcp, and expect other people to pick up the tab if interest rates go up. 

Also completely agree. Though I suspect unfortunately this is where we're heading - as soon as the repos and the squealing starts, the government will step in. And those who were sensible and frugal and put money aside to protect themselves against interest rate rises will get nothing, whereas the feckless will be made whole. It seems to be the modern way, sadly.

As I pointed out yesterday this can`t happen as rates would go even higher, it looks like they are letting the public know this which is a good thing.

https://news.sky.com/story/risky-for-government-to-intervene-as-mortgage-costs-surge-ex-bank-of-england-deputy-warns-12904753

To be clear, I'm not saying it should happen, I hope it doesn't happen, just that I suspect it might. The government has form in this regard e.g. energy bills, furlough, forbearance for renters and mortgage holders during furlough. The current problems with interest rates and inflation are in no small part down to previous policies such as these. Plus there's a general election around the corner and voters to placate.

Mortgage help 'under review', says Michael Gove

https://www.bbc.co.uk/news/business-65922072

Time will tell...

Seems to just be saying the same as my link, can`t be done because interest rates will be pushed up even further, the Truss budget was a wake up call although some tried to pin the blame for all our woes on that budget, which is frankly ridiculous. I think the best we will get on this one is headlines like "Sunak tells banks to halt repo`s" and then banks just go ahead and make their own decisions. The debt based system only works on threat of consequence (repo) if that is waived people will be defaulting on debt left right and centre and we will be in a much bigger mess IMO.

Aberdeenangarse

Apparently…….

Elsewhere in the City, the money markets are indicating a greater than 50% chance that UK interest rates will hit 6% by next February.

That’s up from just under 50% on Friday, Reuters reports.

OhWow

No addional support from the government for mortgage payers -  which continues on their theme of, no government help for the young people who rent from private landlords who; despite the years of low mortgage interest rates; have seen their rents spiral.

Rishi Sunak has urged the banks to offer “bespoke support” for those struggling with their mortgages – but ruled out any extra government extra help for homeowners facing soaring interest rates.

Ahead of a further interest rate rise expected from the Bank of England this week, Mr Sunak told ITV that the government would “stick to the plan” to halve inflation – suggesting no further support would be available.

The PM’s official spokesman said he was “not aware of any plans” for further help despite rising rates, pointing instead to existing cost of living measures such as help with energy bills.

However, No 10 encouraged Britain’s banks to roll out more emergency support agreed with chancellor Jeremy Hunt after a December mortgage summit – including interest-only payments and the extending of mortgage terms.

Asked if Mr Sunak had a message for the banks, his official spokesman said: “It’s simply that we recognise the need for them to look at bespoke support for borrowers who are struggling.”

The No 10 official added: “They need to consider things such as term extensions, or moving to interest-only payments. Those are the sorts of things that we would expect to be offering anyone who is finding it hard.”

https://www.msn.com/en-gb/news/uknews/sunak-rules-out-mortgage-support-as-he-urges-banks-to-help-struggling-homeowners/ar-AA1cJvPd

Aberdeenangarse

Any additional help for mortgage holders would increase inflation which is why it’s a no no.

michaels

Aberdeenangarse said:

Any additional help for mortgage holders would increase inflation which is why it’s a no no.

Why put in place a policy to remove spending power from the economy - only to replace it using borrowed money.  Even for the lib dems it is a bonkers policy - so expect to see it in place before Christmas...

lmitchell

michaels said:

Aberdeenangarse said:

Any additional help for mortgage holders would increase inflation which is why it’s a no no.

Why put in place a policy to remove spending power from the economy - only to replace it using borrowed money.  Even for the lib dems it is a bonkers policy - so expect to see it in place before Christmas...

This is the whole problem though, isn't it? There isn't any spending power in the economy anyway. It's flatlined for the last 6 months and is almost certain to enter life support in the next 6 months.

As so many people keep saying, where do the BoE and government expect ordinary families to just magic an extra £3-4k out of thin air? And before anyone says 'they should've budgeted for this when buying', a rise of 500 basis points in just over a year is something no economist countenanced pre-Ukraine war.