[Finance] BoE Interest Rise

[Napper]

are house prices ever likely to tumble ?

Don't think ever seen it in my life despite constant warnings

 

[Weststander]

Agreed. I’m very lucky to be a & b but far from blasé because my kids are neither. People like my son (lowly paid in the football industry) and his GF (teacher), and daughter (NHS nurse) are going to struggle with the combination of increases hitting Joe Public. Daughter has already taken a new job closer to her home due in part to enormous petrol costs. Massive crisis looming, higher mortgages are just another straw on the camel’s back.

Radio 4 spends quite a bit of time anecdotally looking at those impacted badly. Time and time again teachers and teaching assistants crop up. Many of whom are now taking second jobs eg driving school commute minibuses.

 

[Uncle C]

are house prices ever likely to tumble ?

Don't think ever seen it in my life despite constant warnings

Not all the time mugs are taking out £200K mortgages and kidding themselves that 0% interest rates will last forever.

 

[dazzer6666]

Just a cursory glance at the EasyJet site shows that a one way flight from UK to just about anywhere in Europe on the Easyjet network can be had in October for under 25 quid. Not complaining, will doubtless fill me boots, but how can fares that low be anything other than head-mental on any number of levels?

Prices all set by algos, will go up as the flight fills up - and the real kicker now is if they don’t sell enough seats they’ll simply cancel the flight because we’re becoming used to that happening. I’ve had one cancelled (‘we’re not operating this route for the rest of this year’ - Jamaica) and one changed (a 5 min adjustment in departure time but feared the worst when I saw the ‘important news about your flight’ email heading - Portugal) in the last 10 days. Agree the leading prices are a bit daft - got a pal who regularly gets out to his place in Spain and back for £50 (less than a peak time rail fare to London)

 

[deletebeepbeepbeep]

Base rates in no time at all have gone from 0.1% to 1.75%. The first time buyers have seen a £234 dent in monthly disposable income. Analysts feel we'll see 3% rates soon, that's a total £412 hit to household disposal income.

Home energy - in 2018 the monthly average cost per household was £102, now capped at £164 (1,971/12) and predicted to reach £321 (£3,850/12) by January. An overall increase of £219.

Horrendous, millions will become destitute. Raising interest rates will hit many.

Yeah not a great time to just about have built up enough deposit to buy a first house

 

[Mellor 3 Ward 4]

Virgin are 2.6 billion in debt
EasyJet lost millions
Heathrow lost over a billion I believe
Gatwick lost millions

Tickets are taxed massively, you are taxed/charged for flying out of Heathrow before you even start

The whole sector is a mess.

But maybe if wages were increased at airports for staff - ensuring there are enough of them to cope (paid for by higher ticket price/higher aviation tax) that may help - flights will still be full.

 

[Mellor 3 Ward 4]

Not all the time mugs are taking out £200K mortgages and kidding themselves that 0% interest rates will last forever.

FWIW weren't you were the one who stated they were going to crash about a decade ago - since when we've seen constant growth.....

 

[Half Time Pies]

Its the central banks that got us in to this situation, they used QE to try to stimulate demand in the economy during the pandemic when there was limited supply. Too much money pointed at too few products = inflation.

We need to get out of this situation that we have all been in post 2008 where the financial system has been feeding off stimulus from the central banks, pushing asset prices ever higher and everyone has been living off zero interest rates and high levels of private debt. The whole economy is now inefficient and unproductive and unfortunately we probably need (and will get) a monster recession!

 

[Half Time Pies]

are house prices ever likely to tumble ?

Don't think ever seen it in my life despite constant warnings

The conservative party will do everything in its power to stop this from happening as ever increasing house prices are their number one vote winner, however I suppose it depends on how high interests rates end up having to go before inflation eases. There are many people out their who's finances are pretty tight, add higher interest rates and job losses in to the equation and things could get very interesting.

 

[dazzer6666]

But maybe if wages were increased at airports for staff - ensuring there are enough of them to cope (paid for by higher ticket price/higher aviation tax) that may help - flights will still be full.

It’s not just the airports though……..huge staff shortages in plenty of other industries. At my foundation (school/residential care) we’ve got near-critical gaps in staffing despite increasing wages way above what we’d budgeted, setting up an overseas recruitment programme etc.

 

[Uncle C]

FWIW weren't you were the one who stated they were going to crash about a decade ago - since when we've seen constant growth.....

Like I said there are too many mugs jumping at the lowest interest rates in years. You cant argue with stupid. Some of us saw mortgage rates of 15% a generation ago. Those that didn't heed the warnings are set to suffer.

 

[pb21]

Like I said there are too many mugs jumping at the lowest interest rates in years. You cant argue with stupid. Some of us saw mortgage rates of 15% a generation ago. Those that didn't heed the warnings are set to suffer.

These 'mugs' couldn't afford a mortgage without the low rates.

Just because some of you saw 15% 40 or so years ago, a very different time, doesn't mean those with mortgages taken in the last 10 to 15 years are mugs.

 

[Half Time Pies]

FWIW weren't you were the one who stated they were going to crash about a decade ago - since when we've seen constant growth.....

House prices should be much lower but you have seen constant growth in house prices because interest rates have continued to fall due to central bank policy and QE. This has been a policy decision that I don't think anyone could have forecast.

 

[Uncle C]

These 'mugs' couldn't afford a mortgage without the low rates.

Just because some of you saw 15% 40 or so years ago, a very different time, doesn't mean those with mortgages taken in the last 10 to 15 years are mugs.

Its called being over extended.

 

[dazzer6666]

House prices should be much lower but you have seen constant growth in house prices because interest rates have continued to fall due to central bank policy and QE. This has been a policy decision that I don't think anyone could have forecast.

….and because it’s so expensive to rent in the UK. Landlords typically making 5-8% ROI.

 

[pb21]

Its called being over extended.

Well, yeah if you have more debt than they can afford to repay, your are over extended. It can happen to anyone, at any time, for any reason. What is your point?

 

[Cheshire Cat]

Is there anybody on NSC who actually knows what they are talking about in terms of economics - an actual "economist"?

Instead of a load of failed a-level students who have a vague recollection of something they might have studied (badly) several decades ago and promptly forgot as soon as the exam was over.

I didn't do economics a-level so can approach the issue from a platform of complete ignorance.

The interest rate on my savings account went up yesterday

 

[Uncle Spielberg]

I arranged a few 5 year fixed rates for nsc members in January at under 1% and quite a few in February and March at under 2%, they are close to 3.50% to 4% now

I would advise anyone with a mortgage whose rate is going to end in the next 8 months to start searching now and find out what sort of payment shock you will have as you will have one. Prepare and then look at the market and compare with your present lender. Some lenders mortgage offers last 6 months so start looking before then

PM me if you need any help or advice

 

[Uncle C]

Well, yeah if you have more debt than they can afford to repay, your are over extended. It can happen to anyone, at any time, for any reason. What is your point?

I think you'll see the point in a few months time

 

[dazzer6666]

Man with £25k on credit moans about increased cost of credit

https://www.bbc.co.uk/news/business-62408868