Bank of England announce...

[Matt the Shrimp]

Good news for all those with a mortgage: the BoE have just announced a quarter-percent interest rate cut from 4.75% to 4.5%.

Matt

 

[C C Csiders]

Whoop.

 

[MrB]

Nice!

 

[Leeboy]

yay!

 

[Guest]

smashing

 

[McScriven]

How does that effect house prices?

 

[Matt the Shrimp]

Quote[/b] (McScriven @ Aug. 04 2005,16:32)]How does that effect house prices?

Unlikely to have much effect in the short term; in the medium term, lower interest rates, it is believed, puts upward pressure on house prices - in that, since more people feel that they can afford a mortgage (or to increase their existing borrowing) because of the low interest rates - which means lower monthly repayments, which means that people are tempted to borrow more.

And that pushes up house prices...

Matt

 

[McScriven]

Quote[/b] (Matt the Shrimp @ Aug. 04 2005,16:45)]And that pushes up house prices...

Boooooo! I feared as much. Surely the market must be due a crash sometime soon?

 

[Matt the Shrimp]

Quote[/b] (McScriven @ Aug. 04 2005,16:57)]

Quote[/b] (Matt the Shrimp @ Aug. 04 2005,16:45)]And that pushes up house prices...

Boooooo! I feared as much. Surely the market must be due a crash sometime soon?

I doubt that there's going to be a "crash" as such. Unfortunately, whilst demand is fuelled in the South by decent levels of employment allied with low interest rates, house prices will remain high.

The only way a crash will happen is if Gordon Brown loses total control of interest rates and they leap to late 80's double digit levels.

Can't see that happening whilst Gordy's still there, to be honest.

Matt

 

[RobM.]

That'll save me a whopping £10 a month on a £58,500 mortgage.

ooh i feel dizzy

 

[The General]

My mortgage is paided off. Oh, i meant the parents have paided it off.

 

[Ron Manager]

The fixed rates of the major lenders have been going down pretty steadily the last couple of months or so and the BBR going down is certainly a shot in the arm for a house market that is certainly slowing down. With regards to house prices, they are definitely beginning to level off and I can't really see this rate change altering that. That isn't a bad thing though in my opinion, McScriven is right to voice concerns and it is extremely difficult for first time buyers to get on the market at the moment. Prices were going up quicker than they could save - so the gap between what they had for a deposit and what they needed was just widening. At least a levelling off of house prices will give them a chance.

Have to say though that a crash in the housing market won't do anyone a favour Dave - believe me people in negative equity won't be rushing to go to football matches or subscribe to internet football packages so the repercussions to your job could outweigh the benefit of the houses being cheaper.....

There are some very good mortgage deals out there so shop around - it's getting close to the days of 2 year deals below 4% which were around back in 2003 - making it that little bit more affordable.

 

[McScriven]

Quote[/b] (Ron Manager @ Aug. 04 2005,19:59)]There are some very good mortgage deals out there so shop around - it's getting close to the days of 2 year deals below 4% which were around back in 2003 - making it that little bit more affordable.

My biggest problem is that I could afford something decent but be in a $%&* area which I don't want - call me a snob.

And everything that isn't the size of a shoe box in an OK area is too expensive.