Interest rates – if they drop to 0.5% today

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  • Interest rates – if they drop to 0.5% today
  • A few people investing a fraction of the nation’s wealth in property investment has nothing to do with the mess the world is in right now FFS. The combined wealth (on paper) of every individual in the UK with investment homes will be a tiny blip in the overall economy.

    mudshark
    Member

    A little bit of upward pressure on house prices would help stabilise house prices more quickly.

    In a similar vein some people with a bit of spare cash might think about getting a 2nd home; I’ve always been a bit anti that as reduces available housing stock but is it worth worrying about? In some small desirable areas I think it’s an issue.

    Premier Icon takisawa2
    Subscriber

    Not if Iceland’s any example. Isn’t their interest rate something daft like 30% now? And Japan did the same.

    Icelandic base rate is currently 18%.
    They pay about 15% on Current Accounts.

    They do free local delivery also.

    Premier Icon molgrips
    Subscriber

    But it was only worth it because people were doing it, thus limiting the supply of housing so pushing up the price.

    Very few people really bought second homes. Most bought to let out, which didn’t diminish the supply of housing. In rural beauty spots the problem was severe, agreed tho.

    Housing stock is limited because there are more households than properties. That’s still the case, even more so now because building’s slowed to a crawl. Having said that, a lot of migrant workers are leaving so that might help supply.

    Premier Icon aracer
    Subscriber

    Icelandic base rate is currently 18%.
    They pay about 15% on Current Accounts.

    <Rushes off to put all savings into Icelandic banks>

    AdamW
    Member

    The housing market may soon receive a boost due to falling prices. Here in Nottingham there are absolutely shedloads of trendy flats etc. on the market that can’t sell because they are asking too much and the prices have been dropping recently quite a bit, even out in the suburbs. In a similar vein a number of buy-to-let people are finding it hard to recoup the money for the mortgage and are starting to sell-up. They may make a loss, but investments can go *down* as well as *up*.

    That will be at least good for the young first-time buyers who have a little money tucked by to get onto the housing ladder. Unless, of course, other people start that cycle again and snap up houses when they are at the bottom of the market and cause the prices to rise significantly, pricing them out of the market again. I guess it means that they will just live with their parents until they are old-aged. I’m hoping that mortgagers will be sensible the next time around and the market stays sensible as opposed to stratospheric.

    Premier Icon aracer
    Subscriber

    I’m hoping that mortgagers will be sensible the next time around and the market stays sensible as opposed to stratospheric.

    At least for a few years until everybody forgets again. How many buyers in 2007 remembered even 10 years earlier to the previous crash?

    Premier Icon molgrips
    Subscriber

    The housing market may soon receive a boost due to falling prices.

    And the govt efforts might have an impact. Nationwide seem to be offering 95% mortgages again…

    Premier Icon the-muffin-man
    Subscriber

    The housing market may soon receive a boost due to falling prices.

    An estate agent we do work for said his February sales were really good – not back to the boom days, but waaay better than they have been in the last year.

    AdamW
    Member

    95% doesn’t concern me too much; what would do is the criteria that the lender uses for eligibility. Making sure that the borrower can reasonably afford to pay back the loan without dodgy investment vehicles (usually with a fee/commission attached, natch) may sound boring but sounds a lot safer.

    And, obviously, making sure that those monstrosities called ‘MIPS’ are consigned to the bin of history.

    jonb
    Member

    I think prices have to fall a way yet before most people are interested. Banks are reluctant to lend even now. If they offer you a 95% mortgage they’ve got to value the house at the price offered. Seems to be catching people out where they have the deposit but the banks don’t lend them money as the house isn’t worth what they were trying to mortgage.

    Also, current house prices have dropped due to a shortage in credit. The bigger falls haven’t started yet, we’ve only just entered this recession officially and job losses are only just starting and show no sign of stopping.

    They’ll blip then go back down again.

Viewing 11 posts - 81 through 91 (of 91 total)

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