Base Rate Cut; Will house prices take off again?

loopyh

Just out of interest then would you recommend selling now or should I hang onto my property and wait for recession to pass?

SquatNow

loopyh wrote: »

Just out of interest then would you recommend selling now or should I hang onto my property and wait for recession to pass?

I'de sell now if you can. If will be 18 or 36 years until the next peak.

SquatNow

House Prices aren't going to take off because no-one can borrow money on the cheap anymore because banks can't offload the risk by selling it as MBS/CDO/CDS.

The only think that might do it was if the BoE agreed to BUY UP MBSs regardless of quality... but you'de know if that happens because all your lights will go out and they wont come back on again.

HugoSP

mistyarthur wrote: »

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.

That is why I suggested introducing a reducing rate cap over 5 years. It would give high street retailers plenty of time to adjust their business models. My guess is that they would still sell the same volume of goods but the interest rate would be more achievable.

The fact of the matter is that the vast majority of people gettng HP at 29% could walk into their bank and get an overdraft for a fraction of the cost, or even put it onto their credit card at 14.9%. So no, I don't think sales would be hit. The only people who would be hurt is the loan sharks and I have the same disposition towards high APR lenders as Squat Now has towards BTL investors.

As for the figure, maybe a figure over the BoE base rate would work better, say 6% in 5 years, starting from 15% now.

Anyone remember the introduction of the minimum wage and the mass unemployment that caused? :rolleyes: Thought not. Because businesses knew it was coming and made adjustments to their business models to accommodate it.

PasturesNew

If I were in charge *puts the God cap on*, nobody would get a mortgage over 2x their salary if they had any credit or loans.

To get 3x your salary you'd need no credit/loans.

No credit/loans for the first 3 years after any new or increased mortgage.

After 3 years the only way to get any credit/loan was to get it signed off by every previous company that's been borrowed from. So if you have 1 loan that company have to approve you getting a 2nd. If you approach a 3rd company for credit, 1 & 2 have to both agree. They'd be agreeing to the overall debt amount.

Can I keep this God hat on?

SquatNow

HugoSP wrote: »

Anyone remember the introduction of the minimum wage and the mass unemployment that caused? :rolleyes: Thought not. Because businesses knew it was coming and made adjustments to their business models to accommodate it.

And employed eastern european migrants instead.

Seriously, you are aware that we have the highest unemployment level in history arn't you? You do realise that they've just taken them off the figures? DLA? "Training"? Paying kids to stay at school!

In the old days kids left scholl at 16 and went on the dole. Now they are PAID MORE than dole money to stay at school and stay off the figures.

globalds

chelseablue wrote: »

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

There is only one bank that has passed it on at this point ..
My first mortgage payment to be reduced because of the last interest rate cut only starts this month .And thats from a bank (HSBC)That guarantees to offer mortgages at 1% above base rate .

WTF?_2

loopyh wrote: »

Just out of interest then would you recommend selling now or should I hang onto my property and wait for recession to pass?

If you're not attached to the property and there's a large amount of equity in it then now would be a good time to get that equity out.

It will be a long time before houses are worth as much as they are now, in 'real' terms. (High inflation could prop up house prices to some extent).

Gorgeous_George

Oh yes, wise words indeed !!!!!!.

Spend £400 on a HIP, £1,000 on a solicitor and £5,000 on an Estate Agent and then pay mortgage redemption fees to sell up. Follow this with a few hundred £££s to a letting agent for a credit check and pay rent until properties are cheaper. Then, pay £1,000 for a solicitor, £2,000 admin fees for a mortgage, £2,000 for Stamp Duty.

Add in new carpets and curatins and moving fees and by this time next year, we'll be millionaires Rodney.

What a plonker.

That said, it might just work.

GG

WTF?_2

Gorgeous_George wrote: »

Oh yes, wise words indeed !!!!!!.

Spend £400 on a HIP, £1,000 on a solicitor and £5,000 on an Estate Agent and then pay mortgage redemption fees to sell up. Follow this with a few hundred £££s to a letting agent for a credit check and pay rent until properties are cheaper. Then, pay £1,000 for a solicitor, £2,000 admin fees for a mortgage, £2,000 for Stamp Duty.

Add in new carpets and curatins and moving fees and by this time next year, we'll be millionaires Rodney.

What a plonker.

That said, it might just work.

GG

If you're on the housing ladder you'll have to go through most of that expense when you move up it, anyway.

And if moving houses is such an amazingly onerous expense then how come the market was buzzing for so long - even when people were not only paying all this cash but also taking on a greater mortgage debt by moving up the ladder too?


IMO houses are extremely over-valued and it will be a long time before they reach such stellar levels of overpricing again. It's still possible to sell with a bit of clever discounting so if I were in the position of owning a house with lots of equity and it was just a step on the ladder rather than my 'home for the rest of my life' then I would be looking to lock in the profits. Rent until the market sorts itself out and then jump back in to take advantage of lower prices and being chain free with a large deposit.