Gear Head

iTrader: (2)

Well, the recent increases over the past year seemed to have worked by slowing down the housing market. How long for though?

Dracoro

I think this will prove an un-wise decision by the BOE but only time will tell.

Inflation figures may show an upward rise next week and may further unsettle the economy.

Gear Head

iTrader: (2)

Maybe so, but you can't expect todays cut to have an immediate effect on inflation. This was all planned over a year ago when they started raising the rate by a quarter point every 3 months.
Finally, the results are starting to show and the rate just needed a little tweak.

fast bloke

Two more tweaks on the way early in the new year as well

stilover

I would have prefered interest rates to remain the same or even go up.

If they are going to start slashing rates again, it's only going to fuel the Housing market again. House prices need to come down not rise even more.

Gear Head

iTrader: (2)

so negitive equity is a good thing?

stilover

More likely they've been put under pressure from the Government to lower rates so people keep putting themselves more in debt so they can claim more Stamp duty/death duty etc from an over inflated housing market.

kingofturds

iTrader: (1)

Lets see how many banks follow suit though.

Gear Head

iTrader: (2)

If you can't afford it, don't buy it.
It is not the governments responcibility to control how much every individual borrows. If everyone was in so much debt, how come house prices increased by so much for so long?

girl-in-a-scoob

And they usually wait for the end of the year to do any rates down

stilover

If you've bought a house and borrowed well within your means, you should never go into negative equity. Only those that have gone out and Bought a £600k house just so they can brag to everyone that they've got a £600k house at 100% mortgage are going to feel the pinch.

More fools them

ChefDude

they are trying to combat the dollar rate too

Gear Head

iTrader: (2)

Unless you have a tracker mortgage!

lozgti

"Halifax said it was reducing its standard variable rate from 7.75% to 7.5% from January 1 for new and existing customers."

Not so long ago 4% was a high mortgage rate.I cannot believe people are being totally blind to the current rates on offer

And saving a tenner or so on your mortgage is not going to "bring Christmas cheer to homeowners" as one news site put it.Its all a load of nonsense

Suppose my thread might as well be vaped now too

fast bloke

Say for example you had taken a BoE base rate minus 0.26% tracker out 6 months ago. You would have been paying 5.49 until now. From tomorrow you will be paying 5.24%

Supercue

iTrader: (1)

I feel that Darth is approaching

Luminous

iTrader: (3)

Its a step in the right direction. The very last thing the country needs is a house price crash. I know that there are those who really want that to happen, but lets face it, the only reason you want this is to make a quick buck for yourself.

A house price cooling is a nice goal, and it looks like it has been achieved. That means nobody losses out, and there is nothing wrong with working hard to put a roof over your head.

jaytc2003

iTrader: (1)

house prices arent actually dropping though are they? I thought that is it just that they arent increasing

Dracoro

Well if you bought a house for £500k last month, this month it'll be worth £494.5k so a £5.5k loss.

Gear Head

iTrader: (2)

A lot of reports say that house prices are falling. What they actually meant is that the rate of increase is falling.
Our place has gone up approx 8% over the past 16 months.

Gear Head

iTrader: (2)

How do work that one out?

PeteBrant

No, the month on moth rate is a definite recession. But the year on year rate still shows an increase.

If you take house prices, on average in August, and compare them to Today, we have seen 3 months of drops.

Not a slow down, not slight growth, but a decline. And its the first time it has happened for 12 years.

PeteBrant

Because house prives have dropped on avergae by 1.1% in the last month.


1.1% of £500,000 = £5,500

Therefore the price today would be £494,500

fast bloke

Three consecutive months of small falls, totalling 2%, so yes - a real fall. The year on year average is 6% growth, but that is down from 12% 6 months ago. SO if house prices drop 10% in the next three months, all the Petes can say 'crash', and I can say, 'but it is just 0% growth over a year'

MikeCardiff

iTrader: (2)

I dont know why people are in denial about house prices slowly dropping over the past few months ( and yes, we know there are still idiots in London who will pay huge amounts for overpriced places which bolsters the national average ) - they have risen way above the normal amount for the past 4 or 5 years, so why the surprise when they start to drop again ?

I think though that the interest rate cut wont make a massive difference - stuff like Northern Rock has had a big impact as lenders are starting to realise that lending people who cant really afford it 7 times their salary may not be such a good move after all.

The people who will really get hit are those who took out big mortgages at a one or two year special fixed rate, and will now have to either go onto their current lenders much higher rate, or try and shop around for another deal, both of which will cost them a lot more than they have been paying.

I dont think its a bad thing the BOE have done, but also dont think its going to make a massive difference to most people.

Chris L

Regardless of the rate cut you have to look at how the housing market has been supported over the last 5 to 10 years to really appreciate where we are today. Everyone talks about supply and demand pushing up prices, which is true to a certain extent but it is fuelled by the willingness of the banks to lend money to people regardless of their ability to actually pay it back.

This is coming home to hit the banks hard now. So even if rates are cut, the banks are less willing to lend the money. Also consider that the LIBOR (interbank lending rate) is still at a 9 year high and if the banks won't lend to each other, they certainly won't lend to the average punter in the streets. The Bank of England knows there is a downturn coming, this rate cut and the one or two that will follow are designed to soften the blow, not prevent house prices falling - that is out of their control. There are a couple of bank reports that state that on average house prices in the Uk are about 30% above where they should be. A 10% fall over the next year or so isn't beyond the realms of possibility.

Dracoro

Wot he said

pslewis

I would love Interest rates to be 15% like they were under the Tories - I was a borrower then and it hurt me badly ...... I'm a saver now, just my luck we have a Government who is highly capable at the Economic management of the country!