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The lounge Relax, take a break from photo and camera talk - have a chat about something else for a change. Just keep it clean and polite!

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Old 28th March 2011
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The Mortgage & Home prices Markets?

Time for deep, longing, gazes into the polished crystal balls !

What do you think will happen and why ?

Will Mortage Rates go up ? (I remember 1973 in Jan 8.25% and by Sept 16.25%)

Will they stay low ? (I dont believe they can go lower says an investor! wanting more interest)

Will house prices Fall ? or Rise ?
and WHY ?
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Old 28th March 2011
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Re: The Mortgage & Home prices Markets?

I think this was double-posted by accident, so I have deleted the second one.

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Old 28th March 2011
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Re: The Mortgage & Home prices Markets?

My personal forecast says that house prices will bottom-out around 2016. That's not to say they will fall much further, only that they wont show any real growth until after that.

Interest rates will rise. Probably within the next 12 months they will start to go back towards more normal levels. They may go higher depending on inflation and the gubmint.

Everything else remains subject to the laws of unknowness.
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Old 28th March 2011
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Re: The Mortgage & Home prices Markets?

A lot will depend on what happens to oil prices, particularly in view of the present instability in the Middle East. Inflation is too high already and there is a case for increasing interest rates. However, much of this inflation is due to tax rises rather than price rises (except oil) and it may work its way out of the figures, providing in the meantime it doesn't trigger real inflation, i.e. price inflation.

Neither the Government or the Bank of England (who in theory manage rates independently) will want higher rates as that could stifle the increasingly fragile economic growth, but so to could higher inflation and the last thing they want is stagflation. They really are walking a tightrope and it's too close to call. However, another sharp increase in international oil prices could send the situation spiraling out of control. Unfortunately democracy in the Middle East comes at a price - to us!
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Old 29th March 2011
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Re: The Mortgage & Home prices Markets?

Maybe we shall have a long experience of low Interest Rates as Mainland Europe/EEC have ?

The Social Benefit cuts coming into effect now, will reduce the No. people able to afford renting many large homes in expensive parts of London - so maybe those rents will have to come down? maybe this will also impact on house prices in such locals?
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Re: The Mortgage & Home prices Markets?

Quote:
Originally Posted by Chevvyf1 View Post
Maybe we shall have a long experience of low Interest Rates as Mainland Europe/EEC have ?

The Social Benefit cuts coming into effect now, will reduce the No. people able to afford renting many large homes in expensive parts of London - so maybe those rents will have to come down? maybe this will also impact on house prices in such locals?
There's also no doubt that a rise in mortgage rates will plunge many people into the crisis of not being able to afford them and many more repossessions will result. Less first time buyers, too, will be able to afford a mortgage. This will further depress the housing market and retail will suffer, too, with people having less disposable income. Too many defaulted mortgages could trigger another banking crisis. Oh for that crystal ball!
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Old 29th March 2011
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Re: The Mortgage & Home prices Markets?

Quote:
Originally Posted by Chevvyf1 View Post
Maybe we shall have a long experience of low Interest Rates as Mainland Europe/EEC have ?

The Social Benefit cuts coming into effect now, will reduce the No. people able to afford renting many large homes in expensive parts of London - so maybe those rents will have to come down? maybe this will also impact on house prices in such locals?
One could argue that the social benefits paid to allow people on modest/low incomes to maintain residence in the high price housing areas is effectively a state subsidy for the 'well off' who live and work in London.

Its questionable whether the Guardian lifestyle with its cleaner/nanny and restaurant meals can survive if the cleaner/nanny/shop assistant has to pay the 'market rate' for the accommodation. Unless of course the 'well heeled' are prepared to pay the necessary wages to those workers (say 50k+ for a cleaner). Similarly many infrastructure services will become unsustainable, both train stations and Parliament are dependant on low/minimum waged staff who could not survive if faced either with Market Rates or significant commuting.

Personally I regard the current moves as a 'brave' experiment being conducted by the well off. I look forward to the days when they no longer have a subsidised workforce to clean their streets and change the nappies. The closure of the museums/art galleries/hospitals/universities/schools, the 20 pint, 10 cabbage, 50 zone 1 tube fare. All result concomitant with the jealousy they hold for the support given to the less well off.

Perhaps it's time to realise that London was an interesting experiment, that for a time served a purpose, but it's well past it's bbe date and should be closed.

Nick
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Re: The Mortgage & Home prices Markets?

Nick Eloquently presented ! We have a Mini London here in Winchester and they dont like having to pay "real prices" if you google Barton Farm you will see arguements put to STOP A BIG housing development. Winchester has so many under 5 or under 15 house developments "ribbon" style and of course under 15 = no "AFFORDABLE" (thats affordable to well paid locals, not rural born and local bred/no degree population) Whereas Barton Farm would be a village in itself - HOWEVER it is surrounded by giant MANSION HOMES OF THE WEALTHY ! and would reduce their prices and take away their current views of "fields and countryside" (not owned by them!)
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Re: The Mortgage & Home prices Markets?

House prices are still high by historic standards, especially in the southern half of England. However, there is a shortage of supply so unless there as a large increase in distressed sales (heaven forbid) prices are unlikely to move much in my view.

There is only one direction for interest rates although when and by how much is anyone's guess. Mine would be 3rd quarter and by not much. For purely selfish reasons a significant rise would be most welcome.
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Re: The Mortgage & Home prices Markets?

John sorry I have just seen your post - we do need to keep shopping and let the Money go around ! and the FTB's need the confidence to make a LEAP and BUY but right now they are scared stiff of a rate hike or two and because prices are not low or medium BUT still high [as Adagio says] they are staying at home with Ma & Pa

Adagio I too would like them to rise a bit more ... for same selfish reasons !
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Re: The Mortgage & Home prices Markets?

I love reading Nick's musings on such subjects!

I can understand those who would like rate increases for selfish reasons (savers) but don't forget that at least the first rise will be used by gready banks to increase margins, not put up savings rates!
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Re: The Mortgage & Home prices Markets?

So do I now, enjoy Nicks musings ...

You all may enjoy this ...
http://www.reata.org/interview2.html

SO TRUE ! for SO MANY !
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