Mortgage Rate Rises
- Thread starter glenimp617
- Start date
This might just be too tricky for some to understand.
And what pray tell, what is too tricky to understand?
I know, that's why I explained it the way I did. 7% from summer 2022 to summer 2023 then an approximation of how much extra it would have risen since summer 2023 based on the March 2024 rate (rise since March 2023) being 3.2% it seems reasonable to work on the basis it would be a bit less than than that due to not being a full year since summer 2023. So for example a 7% rise followed by say a 2.8% rise would be under 10% (1.07*1.028).
Add on the 4% nominal fall and my fag packet numbers tally pretty well with the article you quoted i.e. 13.4% real term fall. Which leads to what my second paragraph was driving at, it depends what people think of as a 'crash'. Under 15% real terms doesn't meet my interpretation of it, but it might do for others. There's no commonly accepted definition of "crash" regardless of whether we consider inflation or not. Current house prices are still through the roof but I don't hold out much hope of a serious correction, my expectation is the wider economic situation will play on monetary policy and mean we won't see many significant interest rate rises in the short to medium term.
There's a lot of nuances involved too around how important "real terms" is relative to "nominal terms" when it comes to housing. The reason I say this is because things like LTV and negative equity don't make any adjustment for inflation. If you buy a house with a big mortgage and the nominal value falls by 4% that's a lot less problematic than it could be when it comes to remortgaging. If the nominal value falls by say 20% it could lead to a scenario where some can't get as good LTV at remortgage time, depending on their circumstances, or if mortgaged to the hilt could even find themselves in negative equity.
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- 30 Sep 2005
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Heard on the radio this morning the UK is on the verge of a housing boom 
Heard on the radio this morning the UK is on the verge of a housing boom
I typed that phrase into google and The Express & Telepgraph were the main things to come up lol.
Though the Express is referring to the Halifax, whose report talks of "a modest increase", so sounds like a bit of hyperbole in the headline.
But I guess until we get supply sorted there's always going to be an upward pressure on prices.
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The only boom is the one you hear as the market implodesHeard on the radio this morning the UK is on the verge of a housing boom
Associate
Do we see a base rate cut this week?
Doubt it
With the Fed holding US rates I'd say it was unlikely to see a cut yet.
Also 5 year mortgage rates already have a drop in interest rates priced in.
When they talk about rates dropping they are also not talking about them dropping as low as they were.
I think people need to start getting very comfortable with the thought of the base rate being above 4% for the foreseeable, probably above 4.5%.
The lower of those two would put fixed mortgage rates in the 4.5-5% range anyway.
When they talk about rates dropping they are also not talking about them dropping as low as they were.
I think people need to start getting very comfortable with the thought of the base rate being above 4% for the foreseeable, probably above 4.5%.
The lower of those two would put fixed mortgage rates in the 4.5-5% range anyway.
People are still buying, people are still financing mortgages at these rates. Prices are not going to fall much unless people start losing their jobs i.e a deep recession.
Unfortunately, a lack of supply means there is always going to be long term upwards pressure on housing.
Those 2-3% mortgages we signed up to were stress tested against 6-7% rates as part of the lending criteria. You wouldn’t have got the mortgage is you couldn’t afford 4-5%.
As above, the housing market is generally buoyant at the moment and transactions have returned to more normal levels. People are financing them as they were previously.
Inflation and corresponding wage inflation is balancing some of that out.
4-5pc probably means near stagnation of house prices.
There's still a supply shortage.
This is no bad thing imo.
For myself? Yeah. If rates stay at 4 pc I certainly wouldn't be increasing my mortgage.
Especially so as inflation is so rampant.
There's still a supply shortage.
This is no bad thing imo.
For myself? Yeah. If rates stay at 4 pc I certainly wouldn't be increasing my mortgage.
Especially so as inflation is so rampant.
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Caporegime
Well, unless people lied, which of course no one would do...
Is the market buoyant price wise? I would suggest that its largely stagnant. Fundamentally as long as people can just afford it now, they will be happy to buy a house as rates will drop a bit and prices simply won't crash. There simply isn't enough building happening to put pressure on house prices.
You have to prove bank statements and your pay slips. You can’t ’just lie’ like you could back in the day.
Getting any substantial increase to your salary or reduction of your outgoings would require a pretty substantial level of fraud these days, particularly as most substantial outgoings show up on a credit check anyway.
Buoyant = there are enough buyers and sellers in the market to maintain a steady stream of transactions and stable prices.
The above is what is happening right now, certainly in my area. It’s only the sellers who are out to lunch on their pricing which aren’t selling. Everything g else is selling in a reasonable amount of time.
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