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Interest rates
Former Member
Posts: 1,876,323 The Mix Honorary Guru
Call me callous, naive and silly, but mortgage owners and savers have to realise that interest rates aren't set for their benefit!
Monetary policy is a tool used for macroeconomic 'finetuning'. If GDP growth is slow, you lower rates. If inflation is high, you raise them.
So really saving and homeowning are secondary when determining at what level interest rates should be!
Monetary policy is a tool used for macroeconomic 'finetuning'. If GDP growth is slow, you lower rates. If inflation is high, you raise them.
So really saving and homeowning are secondary when determining at what level interest rates should be!
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Maybe, but whinging homeowners/savers piss me off! :cool: (I know I used it, everybody. Bite me!
I need a house so bad.
Having said that, I'm happy to admit that the market has been out of control for the last 8 years or so. I don't particularly plan to 'climb the ladder' or to sell for speculation, so I don't have a problem with a 0% growth or even a slight decrease for the next two or three years. But a crash as such but be terrible news for everyone, homeowners or not...
They would NOT be rising interest rates if it were not for the housing market.
many people lost their homes and businesses.
When the Bank of England rises interest rates to cool off inflation and spending, people with mortages are the only ones paying the price. And it is a big effect. Every 0.25% increase it's costing me and my partner some £60 a month extra.
Credit card debt and easy loans are ruining the economy. On my 18th my bank sent me a b-day card, which they'd been doing for a while, but this one said 'now you're 18 how about a loan?'. Having a laugh mate?!
Also the economy is still having some problems because of sept.11th. France and Germany are in slight declines, so really we're quite lucky. Sort of; a slow down would be nice, I'd rather not have to spend several thousand to by a cardboard box. I want a house.
It's just in my eyes a completely ridiculously out of hand market at the moment.
No one I know really can afford to step on to the ladder, let alone anything else.
For a 2 bed house in an estate where I live you're looking at around 90-105K !!!!
Four years ago we sold our 4 bed, 2 bathroom, kitchen, dining room, spare room, etc etc etc house for 58K !!!!
My dad also rents now as he was waiting to get back on his feet, now he can't afford to get a mortgage or a house so he is basically shittin himself
Those stuck renting would be punished hard, becayuse landlords would raise rental price sin order to keep their profits. Which would twat us right at the minute, as we are not in a position to buy.
This happens every so often, prices will stagnate until wages catch up.
MR: interest rates reached thsoe levels because of the ERM. It'd have been the same under Kinnock.
Plus maybe you'd be in a position to buy if the prices crashed properly
Personally, I think a small-medium crash is on the cards, I don't buy into this soft landing stuff.
They are still rising, too fast, especially in Wales .. Which will inevitably end in tears.
I blame the banks for lending out such ridiculous amounts
That's ridiculous in itself, and a sign of society not being able to take responsibility for itself. Everyone wants to blame someone else. If you use your credit card, and can't pay it off, it's your fault and no-one elses. If you take out a loan to pay for a new car you don't need, and can't quite afford the repayments, it's entirly your own fault.
I don't mean to suggest that everyone in debt is there through idiocy and finds it easy to get out of it. Students are an excellent example of debt for necessity.
But if we start blaming the banks instead of ourselves that's when we're really in trouble.
At least for those who already own property they can rise and fall with the market. That's where you're probably going to be all right, so long as the entire economy doesn't collapse. Remember, property is the safest method of investing, always has been. Doesn't mean it's foolproof though.
Not really, back in the day when my dad/mum were getting mortgages, and even 5 years ago, the standard mortgage was UPTO 3.5 x Salary, if that...
It was also upto 95% loan !
Now you can get 5 x Salary with 100% mortgage, showing no real committment to start!
Example, a guy with work at me, we shall call him M.
He got kicked out of his house a while ago which he was renting, he has 3 kids, a wife, he was desperate.
He went to his bank, namely H. They lent him 100% Mortgage on 5 x Salary (even though he's not permanent) - But 100% on 5 x Salary didn't quite meet the house price so ON TOP of that they lent him 20% of the property value in the form of a loan!
This man suffers depression etc as it is and he was desperate, I hope for his sake he manages to keep up those payments