Base Rate Cut; Will house prices take off again?

chelseablue

Hope Im not starting a slanging match about the 'c' word but I am genuinely interested:

Do you think house prices will start increasing again because of the rate cut today?

As a future FTB I hope they dont; ex-council houses have asking prices of £275K where I'm from :eek:

Jorgan_2

I hope not. And that comes from an Estate Agent.
Despite what many people appear to think, interest rates aren't solely related to house prices, they involve the whole economy. I think the base rate cut is more to do with trying restore confidence in consumers and industry than trying to push house prices up.

TTMCMschine

No. This is desperation from the banks. Its too late, the economy is going to collapse.

Suzy_M

Hopefully, it won't but even more hopefully it may help to quell some of the increasing panic over negative equity (a la tabloid telly).

free4440273

Never say never I suspect; but they might very well fall off a cliff (drops of 20 to 30 per cent) but I doubt it....

mistyarthur

I dont think they will go up, its more to do with the credit crunch that the prices are dropping but it may help people afford repayments better meaning less repossesions in the long-run and here it is I think it will help prices stabalise before going to much lower, I don't believe that we are in for a proper crash just a drop...

HugoSP

They won't go up as a result of the IR cut.

The problem is that new buyers will be fewer and further between because more of them will find it hard to get a mortgage, regardless of interest rates.

It seems daft that it is easier to get an HP deal at PC World for 29% than it is to get a mortgage at 6%. I know there is more money involved but if I had legeslative powers I would cap lending rates at 20% starting from NOW, then gradually reduce them to 10% over the next 5 years.

I would also curb non mortgage lending to strict limits, so that people could only take out finance that they could afford. This way I truly believe that the economy wouldn't be so sensitive to finance.

I would also churn out free domestic financial awareness courses, rather like the govt are churning out free basic english and maths courses at the moment. Infact it would be obligatory for anyone looking to take out finance to attend one of these courses.

I would also penalise lenders who lend irresponsibly and those who harrass borrowers by effectively awarding the debt back to the borrower, so greedy banks and lenders will lose their rights to repayment of the loan.

That will do for now. I have some fairly extreme views on the loan/mortgage industry.

movilogo

Very soon banks will revert back to older systems - like lending 3 times of earning to a maximum
That means more & more people will find getting a mortgage difficult.

Houses on average will take longer to sell. Some sellers will be desperate and be forced to reduce price. But there will be a limit how low they can go. So, if that limit does not touch max mortgage people can get, there will be a deadlock in the market.

So, basically house market will slow down.

But not all people or all houses will be affected by this.

marc5180

HugoSP wrote: »

They won't go up as a result of the IR cut.

The problem is that new buyers will be fewer and further between because more of them will find it hard to get a mortgage, regardless of interest rates.

It seems daft that it is easier to get an HP deal at PC World for 29% than it is to get a mortgage at 6%. I know there is more money involved but if I had legeslative powers I would cap lending rates at 20% starting from NOW, then gradually reduce them to 10% over the next 5 years.

I would also curb non mortgage lending to strict limits, so that people could only take out finance that they could afford. This way I truly believe that the economy wouldn't be so sensitive to finance.

I would also churn out free domestic financial awareness courses, rather like the govt are churning out free basic english and maths courses at the moment. Infact it would be obligatory for anyone looking to take out finance to attend one of these courses.

I would also penalise lenders who lend irresponsibly and those who harrass borrowers by effectively awarding the debt back to the borrower, so greedy banks and lenders will lose their rights to repayment of the loan.

That will do for now. I have some fairly extreme views on the loan/mortgage industry.

Hugo sp for Prime Minister i say:T:T:T

Tozer

TTMCMschine wrote: »

No. This is desperation from the banks. Its too late, the economy is going to collapse.

Bit of an overreaction? Even if there is a recession, it is purely part of the normal economic cycle.

mistyarthur

marc5180 wrote: »

Hugo sp for Prime Minister i say:T:T:T

Are you sure because by removing the millions maybe even billions that the banks and places like pcworld make by selling these over inflated products to people you will be damaging the economy. Banks may be making billons, perhaps more then they should but they can only do it if you agree to it, and they pay tax on their profits and pcworld gets commision meaning they can sell things cheaper and expand their business therefore investing in the economy. We might want to cap it but saying that everyone should lend to you at a maximum of 10 per cent will mean that for a lot it wouldn't be worth the bother because of the risks associated.