The general consensus does seem to be that rates will fall in the next 2-3 years but nobody is predicting a return to near 0 I think the ‘best’ we can expect would be a return to around 4% but that will take a massive fall in inflation which might not happen as quickly as people want’
Mortgage Rate Rises
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Soldato
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I just can’t see how that’ll be the case - I believe the factors keeping rates high are going to be an issue for many years yet.
Of course the lenders will know much more than I do - I just can’t see how it’ll drop in the short to medium term.
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It depends who you listen to. Most of the reading I've done suggests rates will remain high for many years. I guess it depends on your definition of high though, as most people have gotten used to <2%
Probably between 4-5 at best is my guess, and it is only a guess. Put it this way, we did a 5yr fix not too long ago. In fact I think it was pretty much the last week any banks were offering anything under 4%. We got 3.9%. If rates are the same in 5yrs I'll be happy.
When wealth has been sucked out the of the economy like it has, I can't see anything which suggests otherwise.
Probably between 4-5 at best is my guess, and it is only a guess. Put it this way, we did a 5yr fix not too long ago. In fact I think it was pretty much the last week any banks were offering anything under 4%. We got 3.9%. If rates are the same in 5yrs I'll be happy.
When wealth has been sucked out the of the economy like it has, I can't see anything which suggests otherwise.
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Caporegime
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We are in a situation where the reality is interest rates should have been risen higher a long time ago but it was just multiple governments (worldwide) kicking the can down the road. House prices wouldn't have gone mental like they have done as well as things like cars etc when people had basically free credit.
Personally I think they should stay around 4-5% area long term.
Soldato
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4-5% interest rates with 2% inflation would be interesting to see play out.
Soldato
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I said before the lenders arent necessarily predicting. they are also influenced by others (competition) but mainly what they can borrow for.
I really wouldnt want to be predicting long term rates in the UK.
Lets face it how many have been saying "who would have predicted rates to soar, no one was predicting that". IE too volatile, economy with weak foundations etc etc
I do agree that a period of stability with "reasonable" rates would probably need 3-6% or something.
I would also like to see, some hope, some house price stability, ideally just no growth as opposed to boom and bust.
Even if you have slipped into neg equity, time will fix that.
A complete market stall is no good for anyone. Loads won't move or buy new at 6%. They will come down in my opinion but I think they will settle in at 4.5%. This will still be a killer for a lot of people coming off fixes over the next couple of years.
Yeah I reckon somewhere between 4 and 5%, but I don't think we'll see it until around 2025 - after inflation has hopefully reduced.
Interest rates should never go back to being lower than 4%,
I'm seeing a hell of a lot of for sales signs. Nearly as many as during covid.
There were none a few months ago. But 3 have gone up on our postcode alone. Even our neighbours.
Maybe for people moving up (rather than FTB) have settled in to these rates. After all. In a falling market it matters less if you're buying and selling.
As to the historic lows. Yes. I agree that they shouldn't have been so low so long. It fueled growth and makes the rises all the more painful
There were none a few months ago. But 3 have gone up on our postcode alone. Even our neighbours.
Maybe for people moving up (rather than FTB) have settled in to these rates. After all. In a falling market it matters less if you're buying and selling.
As to the historic lows. Yes. I agree that they shouldn't have been so low so long. It fueled growth and makes the rises all the more painful
I'd hope for 2-3. I think 4 will stall house prices or worse cause further decline. FTB payments on prices this high with 4pc rates seems too high. Too high.
Of course if they had have been 3pc maybe this insane growth wouldn't have happened
I'm not sure I agree they should not go lower. Different times call for different measures. What happens in 10 years if house prices have gone up another 50%? Nobody will be able to get mortgages at all. This is the problem. House prices keep rising. This is almost a given. We've never seen anything other than this behaviour over time.
Soldato
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Problem is your only taking account the impact of interest rates on house price affordability.
There is a much more significant chunk, the rest of the economy!
Selling good houses in good areas is still pretty easy the initial shock of the 6% rate has subsided somewhat, the reports of house price falls are nationwide averages there is no evidence where I live of them falling they just aren't going up much if at all (still record street prices being set though) when we sold ours earlier this year we got way more than we expected had plenty of viewing and offers the estate agent said the only difference pre rate rises was that you got 50 viewings in a week now you get 25 but they are all coming with sales agreed and mortgage offers in place. House price falls are always more pronounced in less desirable areas and less desirable properties. Really we need 10-20 years of stable prices and stable interest rates in that 4-5% band.
Deleted User 298457
Deleted User 298457
Is it an unpopular opinion to say house prices are a bit irrelevant/relative?
I mean I'm fortunate enough to live in a very expensive house, and I have lots of friends doing the same. The loud minority on here don't represent my lived experience.
Like Fox whinging about Cornwall but there's a perfectly good house in st austall for 200k. Just cut your cloth accordingly?
Work a bit harder or live somewhere less desirable.
I mean I'm fortunate enough to live in a very expensive house, and I have lots of friends doing the same. The loud minority on here don't represent my lived experience.
Like Fox whinging about Cornwall but there's a perfectly good house in st austall for 200k. Just cut your cloth accordingly?
Work a bit harder or live somewhere less desirable.
For myself now I'm on the ladder it matters less. Any prices up or down are (on average) mirrored. So down swings are actually desirable, as next house declines more than current house (in pounds not percent).
Give or take there are houses I'd love where I want to be 50-70k more. (370-400)
And houses I'd be happy with same price. I would love to not have to get a second mortgage. But it looks like might have to.
However, as a FTB, I found it very difficult due to fear of negative equity (buying at the tip top of the market)
I follow it more Out of interest now
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Soldato
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My experience is that the higher valued will drop more in comparative terms, the lowest will move far less.
IMO thats because those who hit issues are more likely to be in larger houses and able to downsize, those in cheapest cant do that.
IMO thats because those who hit issues are more likely to be in larger houses and able to downsize, those in cheapest cant do that.
Yes I would say your opinion is unpopular.
"I'm alright Jack" is basically what you're saying. You mix with richer people so views may be skewed. "The loud minority" you speak of on here, I would say are more a majority. Everyone I speak to shares the same concerns and worries, but it is not as amplified as on a dedicated thread where people have time to talk about it a lot in detail.
Work a bit harder? Is that real advice to people of the UK struggling? I don't think you mean that truly.
Living somewhere else.... it's been discussed to high heaven on here. It's very unrealistic to expect people to move away from everything they know and have around them.
Deleted User 298457
Deleted User 298457
I figured - but you must recognise this is a small sample size of archetypical whingers (GD).
Edit: my point being, people are buying these houses. It isn't just boomer accidental millionaires.
I'm not "alright jack" at all; I'm working my arse off. First gen uni, college and uni drop out, etc etc.
Why? I moved away to somewhere where there were opportunities. Whinging you have to move a bit inland to St Austall because your dads old house is now worth a million is just entitlement 101.
The fact FoxEye will inherit a score for none of his own hard work is also lol.
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As am I. Now imagine me saying you know what, work a bit harder actually you moaner.
I'll answer the question about moving in more detail...
For someone who lives in and around the South East, moving somewhere with less demand and hence lower prices is tricky. It honestly means moving quite far generally speaking - aside from the random pockets of places where demand is lower, usually due to it being a particularly bad area say. So when you then move way West or Way North, it becomes over an hour away from your "base". That base being your support network, friends, family. Your life basically. If we could teleport from A to B in seconds, we could all spread out, but we locate for a combination of reasons to get a good work life balance. It's complex. I actually would not mind moving up North to get more for my money, but I cannot expect my kids to suddenly be told you know what, all your friends you likely won't see again. School will change. All the sports stuff you live for and do regularly...gone. It's brutal imo.
Caporegime
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For me it is irrelevant as my house is nearly finished being paid for and I could quite happily live here till I die. Large 3 bed detached with decent front and back gardens. When the kids fly the nest it is more than enough space. Get the garage extension done so I can tinker in the winter and I am set really.
What worries me is how are my kids going to get on the ladder. Last thing I want is my daughter living at home till she is 30. I don't want her bringing boys home!
When we bought our house in 2010. The mortgage we got was only 2x our combined annual salary with a 25% deposit. To say something like that only a decade later people would think you are mad.
Luckily house prices have fallen 4.6% year to date and will go lower but they still need to come back down to pre covid rates really.
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