Mortgage Rate Rises

adam cool dude said:
Yes. Houses should be a place to live not a nest egg imo. Cheaper housing boosts the economy for the vast majority of people.

Once housing isn't its own economy for the filthy rich then the middle and working class can prosper.

This is all utopia BS that will never happen however. I am also a homeowner so this isn't being bitter but more for my children than myself as I was lucky.
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They won't drop that much for average houses simply because there's not enough of them. You've got renter's paying more than mortgage holders for similar properties in the same areas even at current rates - so plenty of people are in a position where they can consider purchasing even at the rates we see now for mortgages if prices were to drop 30%

I think we'll see a bigger drop at the high end only (450k+ up north, 650k+ down south)
 
Inflation figures dropped by more than expected today to 7.9% so maybe there is hope the interest rates have peaked now
 
I wonder if this sudden shock will bring about a move to longer term mortgages like in the US/Europe where people fix for up to 35yrs and then don't have the ups/downs we have here.

When i've been looking in Spain recently, the rates are still being offered around 3-4% which seems reasonable. Or will the short termism that's popular in the UK mean people would always hope that they could get under than with shorter fixes in the good times and just ignore the risk of the bad times
 
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Martynt74 said:
I wonder if this sudden shock will bring about a move to longer term mortgages like in the US/Europe where people fix for up to 35yrs and then don't have the ups/downs we have here.

When i've been looking in Spain recently, the rates are still being offered around 3-4% which seems reasonable. Or will the short termism that's popular in the UK mean people would always hope that they could get under than with shorter fixes in the good times and just ignore the risk of the bad times
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Europe's inflation is a lot lower than ours because they have state owned power and we do not so it is far easier for them to bring it under control.
 
Martynt74 said:
I wonder if this sudden shock will bring about a move to longer term mortgages like in the US/Europe where people fix for up to 35yrs and then don't have the ups/downs we have here.

When i've been looking in Spain recently, the rates are still being offered around 3-4% which seems reasonable. Or will the short termism that's popular in the UK mean people would always hope that they could get under than with shorter fixes in the good times and just ignore the risk of the bad times
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We can get fixes for over 35 years here though?!
 
Martynt74 said:
I wonder if this sudden shock will bring about a move to longer term mortgages like in the US/Europe where people fix for up to 35yrs and then don't have the ups/downs we have here.
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Doubt it - why would the banks promote a product where they take the risk. Currently its all on us at the minute
 
neocon said:
What does it need to come down to before they lower interest rates?
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The old school method of combatting inflation is to have interest rates higher than inflation......

We've also seen in the US that they kept talking about learning from the past and holding rates for a longer period to ensure inflation is kept down and I don't see the UK deviating much from that idea either.

Higher rates is good for the £ which means imports cost less (thereby helping to reduce inflation) so I expect BoE rates to remain high well into next year.
 
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