Base rate rise!

aardvark said:
45-1, damn - i only got 29-1 and that was a month ago - oh well, thats betfair for you.
i should have bet more but didn't really think the mpc had the balls to raise rates, despite the fact that they should be a lot higher to combat real inflation anyway.

its quite funny how businesses and estate agents are saying its a disaster on the news - all for a tiny 0.25% rise - 5.25% interest rate is still pretty low - especially compared to what its going to be in a years time ;)
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Ah yes - another of the doom mongers.
While you're still trying to tell me that you know what the rate is going to be like in a years time can you just give me the lottery numbers for the next couple of weeks as I'm sure you're just as qualified to do so?

Sarcasm on:

Yer, yer - this is the end.
Maybe the doom mongers were right, this is the beginning of the end.
A surprise to all but the "informed" - I think this is now the start of a major drop in the housing market and the start of the much famed recession.
I expect to be in negative equity by the end of next month - just in time as I go to re-arrange my mortage as I'm reaching the end of my current two year fixed period.

Sarcasm off:

Oh dear, my mortgage repayments have gone up by around £15 - £20 per month.
Looks like we'll have to buy a couple less things at the supermarket this week.
Oh look, house prices still increasing - people hoping to get their first foot on the ladder can see no decrease in house prices yet a higher rate of interest to worry about.
 
stoofa said:
Oh look, house prices still increasing - people hoping to get their first foot on the ladder can see no decrease in house prices yet a higher rate of interest to worry about.
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That's what I don't get. Assuming that minor rate rises don't cause a massive drop in house prices, an interest rate rise just makes it even harder for first time buyers. The only thing that is going to cause a big drop is a change in policy, such as preventing buy-to-let investors offseting their rent income against mortgage payments, thus avoiding income tax. That would cause many people to sell = drop in house prices. Can't see it happening though, as the GVT likes buy-to-let as they are being used to reduce the pension burden.
 
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On the last 2 occassions (before yesterday's) that there have been interest rate hikes, house prices have continued their unabated move upwards. In fact, on the news of the interest rate hike, house price inflation continued to go up.

Furthermore, the last 2 interest rate hikes that were done going into the christmas spending season - I watched the news a couple of days ago and apparently retailers were saying this has been one of the best christmases ever, especially for M+S.

So to summarise: 0.5% interest rate increase in 3 months: people spend more at xmas than ever, mortgage applications go through the roof, house prices move further up.

It seems to me that these 0.25% rate rises just aren't having any effect whatsoever.

Personally, if someone told me that the interest rate on my house will go up by £15/month, this really wont scare me in the slightest - I spend more than this on food alone in 3 days. For people who are renting/living with friends or family - their budgets will be unaffected.

All in all, I feel this softly softly approach is going to have no effect whatsoever.
 
sunama said:
It seems to me that these 0.25% rate rises just aren't having any effect whatsoever.
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Yes, but the accumalated effect of multiple 0.25% rises is bad for the 'average' home owner. 1% equates to around an extra £150 a month on a 200k mortgage, a lot of money to find spare for a family with kids and possibly enough to push people over the edge of affordability as proven by the increase in bad debt, IVAs and repossessions.
 
Samtheman1k said:
Yes, but the accumalated effect of multiple 0.25% rises is bad for the 'average' home owner. 1% equates to around an extra £150 a month on a 200k mortgage, a lot of money to find spare for a family with kids and possibly enough to push people over the edge of affordability as proven by the increase in bad debt, IVAs and repossessions.
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Indeed bad debt is increasing, as are IVAs and repossessions, however, inflation and house price inflation are also on the rise.

There are few irresponsible people out there who have debt upto their eyeballs. But one thing to remember is that no matter how high/low interest rates are, these people will always find themselves in trouble.

What Im talking about is the middle of the road people who are considered normal (ie. not big-spenders, not big savers, just average people) - and because this section of the community is also the majority, it is they who need to be convinced to curb their spending on retail items/houses, etc, not the irresponsible person. 0.25% increases are not really going to affect the average person, unless we have about 8 or more of them in quick succession. Even then, if rates were 2% higher than they are now, I think it would have little effect.
 
lozza23_uk said:
surely a 1 bed flat in cornwall for 140k is possible.

infact i have just found a new development in st ives, 2 bed flat 140k.

and a 1 bed detahced bungalow in perranporth.
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both areas with very little work, and quite a way away from places that HAVE work. tourist areas.
 
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