Interest rate doubled (increased by the least it realistically could have)

LabR@t said:
Has the rate doubled, yes or no?
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Indeed it has, but, it’s still effectively and relatively sod all, I doubt it’ll stay this low, probably be at 3% within a year or so but even that,historically, is still exceptionally low.
 
They have to be careful. Rate rises will stuff a lot of people who have mortgages. Repossessions? If peoples mortgages go up, the money they have to spend on cars, holidays, clothes will drop meaning those areas will suffer. It's a balancing act.
House prices are silly high, but drop them and you have negative equity to deal with. What a mess.

Those companies who have increased their prices by 20% and blamed it on brexit and the weak pound won't be as quick to drop them.
 
SpeedFreak said:
Sentiment is what matters. See this as the first step towards flat or even reducing house prices.
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I know, I'm just being facetious. I've (almost) given up arguing over Brexit. I'm just waiting for it to happen so that the whole house of cards will come crashing down. I'm hoping some sort of measures against foreign investment, combined with higher interest rates, anti-BTL measures and of course Brexit will bring about the hard property crash we need in the SE.

TheOracle said:
They have to be careful. Rate rises will stuff a lot of people who have mortgages. Repossessions?
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Boohoo.

There are 45 million savers in the UK compared to 4 million households with variable rate trackers. Why do people keep banging on about those "poor" people with mortgages? They've been living the life of riley whilst savers and/or renters have been royally screwed over with ever-inflating rents and terrible returns on their savings. Let's bang it up to 5% I say. Then we'll really sort the wheat from the chaff!
 
Scam said:
I know, I'm just being facetious. I've (almost) given up arguing over Brexit. I'm just waiting for it to happen so that the whole house of cards will come crashing down. I'm hoping some sort of measures against foreign investment, combined with higher interest rates, anti-BTL measures and of course Brexit will bring about the hard property crash we need in the SE.
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are you suggesting people would be wise to sell their house and rent for a few years?
 
TheOracle said:
are you suggesting people would be wise to sell their house and rent for a few years?
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No, see my edit. I just want a house price crash. If foreign investors and private landlords have reason to start leaving the London market then prices will fall. If people who thought it was a good idea to spend £500k on a 1-2 bedroom flat in London end up needing to sell because they can't afford their mortgage on 5% interest, so be it. That'll also help prices fall. I just wish they'd hurry up with it.
 
VincentHanna said:
IMO They are giving themselves wiggle room for when the economy is in trouble. It might go up to 0.75% or 1% max in the next 6 months but after that if there's problems it'll soon drop back down.
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It may get to 1%, but not likely till 2020. Personally, I long for noughties and the likes of 5/6%. However, realistically that would expose far too many people to severe financial stress.
 
Is there an argument that in general, when interest rates go up, inflation goes up and therefore wages go up. Therefore its years of previous high inflation and wage increases that have meant our parents and us older people with old mortgages find they represent a smaller and smaller part of our income. So in the long run higher interest rates wont actually cost more?
 
TheOracle said:
Things aren't that bad when people are spending £1,000 on the new iphone
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I've thought this sort of thing. So long as Hotel Chocolat remains in business, it can't be that bad. So long as the Chill Factor.e in Manchester - basically a giant fridge - remains in business, it can't be that bad.
 
Overlag said:
are you serious? 0.5% is nothing. Start panicing when it hit 10-20%
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Does not need to to be 10%to cause problems, 4% and it will cause problems and a housing crash as the debt is larger, lol if it hit 10% the majority with mortgages taken out over the past 15 years would over night cause misery and lose of their home, 20% we are looking at a country wide disaster and house prices valuation rocketing downwards losing 70% of value with-in 3 months of a 20% interest rise.
 
rs1800 said:
Is there an argument that in general, when interest rates go up, inflation goes up and therefore wages go up. Therefore its years of previous high inflation and wage increases that have meant our parents and us older people with old mortgages find they represent a smaller and smaller part of our income. So in the long run higher interest rates wont actually cost more?
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Niot with globalisation wages will remain lower.
 
rs1800 said:
Is there an argument that in general, when interest rates go up, inflation goes up and therefore wages go up. Therefore its years of previous high inflation and wage increases that have meant our parents and us older people with old mortgages find they represent a smaller and smaller part of our income. So in the long run higher interest rates wont actually cost more?
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Interest rate increases are meant to reduce inflation by taking the heat out of the economy by taking money out of people’s pockets by increased mortgage costs and also encouraging saving rather than spending.
 
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