BOE cuts 1.5% (Nov), 1% (Dec) and 0.5% (Jan, Feb & Mar)

[Darbyand]

Lucky timing really. If it had been due 6 months later I'd have probably been watching this in helpless despair.

Not sure how interest rate hikes work on supply side inflation. Don't imagine many people are leisurely deciding whether to switch their discretionary income between luxuries and savings.

[blahblah]

That's pretty much why the Inflation line is an out and out lie; except that it protects the Pound, which in turn keeps the price of imports down which does keep inflation from rising more. (The Euro took a hit as the EU Interest Rate lagged too much behind the USDollar. We were on the cusp of similar happening with the Credit Crunch, but Brown got people together to act together and resist such rises, which meant the impact was far less than it could have been.)

[murf]

People pay more on mortgages = less disposable income = less spending = reduced prices to attract buyers = deflation

[blahblah]

People pay more on mortgages = less disposable income = less spending = reduced prices to attract buyers = deflation

In "normal" times, thus is true and some other stuff - but we appear to be a nation in a Disposable Income Crisis?

[murf]

It is still a factor, if maybe not as significant/dominant one in these days.

[blahblah]

Not really as the price pressure in the UK is cost driven ie fuel and wheat etc and this has blown away any Demand side pressure. I'm not sure if this is true in the US, which in normal times would spread here, and other places.

Our Disposable (ie after mortgages) Income is so low that the Govt is giving out hard cash; so blaming low Interest Rates lacks credence.

[Darbyand]

Agreed blah. This is stagflation and they've decided to go for inflation as the greater of two evils. It's going to cause a lot of misery.

[Darbyand]

Fortunately we also have the silver bullet of joining a massive trading bloc on our doorstep with frictionless free trade and almost unlimited cheap labour.

[blahblah]

Agreed blah. This is stagflation and they've decided to go for inflation as the greater of two evils. It's going to cause a lot of misery.

The Govt really should change the BoE's Inflation target as 2% is laughable given the 9-10% rise in fuel, wheat etc prices - but then Boris has a tenuous relationship with reality and is actually on holiday

[unc.si.]

Ha ha my remortgage is at the 60% LTV bracket. That's from a generic page of interest rates not, sadly, for my specific circumstances.

I've just double checked and the rate I got yesterday was actually 2.19. it was 2.24 when I did that screenshot and is currently 2.34 so I'm roughly even on repaying the ERC inside 24 hours

So how smug are you feeling right now?

Looking like a better and better decision every day

[forestfan]

I’m pleased I fixed until 2024… at the moment I think I’ll just be seeing how much I can pay off in cash when it comes up for renewal.

[Darbyand]

Ha ha my remortgage is at the 60% LTV bracket. That's from a generic page of interest rates not, sadly, for my specific circumstances.

I've just double checked and the rate I got yesterday was actually 2.19. it was 2.24 when I did that screenshot and is currently 2.34 so I'm roughly even on repaying the ERC inside 24 hours

So how smug are you feeling right now?

Looking like a better and better decision every day

I would've been one of the lucky ones whose 're-fix window' opened up summer 22 anyway. If I'd waited for that, rather than paying the ERC in spring, it probably would've been an £80-100 uplift for the next 60 months. But yes, one of my better financial decisions in retrospect.

Check out this graph and see how many people are going to be in a world of pain over the next few years. No need for it either, cretins playing politics with people's financial futures

[forestfan]

Yeah, and still some saying “interest rates were 17% in the 1970s and we survived it, stop complaining”.

House prices as a percentage of earnings were slightly lower back then.

[bluenosey]

Ha ha my remortgage is at the 60% LTV bracket. That's from a generic page of interest rates not, sadly, for my specific circumstances.

I've just double checked and the rate I got yesterday was actually 2.19. it was 2.24 when I did that screenshot and is currently 2.34 so I'm roughly even on repaying the ERC inside 24 hours

So how smug are you feeling right now?

Looking like a better and better decision every day

I would've been one of the lucky ones whose 're-fix window' opened up summer 22 anyway. If I'd waited for that, rather than paying the ERC in spring, it probably would've been an £80-100 uplift for the next 60 months. But yes, one of my better financial decisions in retrospect.

Check out this graph and see how many people are going to be in a world of pain over the next few years. No need for it either, cretins playing politics with people's financial futures

I'm one of those. Suppose I'm lucky to have benefited from low rates since around 2008, just didnt expect the increase to be that sudden....

[bluenosey]

Fortunately we also have the silver bullet of joining a massive trading bloc on our doorstep with frictionless free trade and almost unlimited cheap labour.

Unlimited cheap labour would only make the rich richer whilst heaping misery on everyone else. Think the rich have had enough hand outs for now without making it worse.

[Darbyand]

Yeah, and still some saying “interest rates were 17% in the 1970s and we survived it, stop complaining”.

House prices as a percentage of earnings were slightly lower back then.

Spot on, this is a very interesting thread on headline rate vs affordability:

https://twitter.com/EdConwaySky/status/ ... 0dRtA&s=19

[Darbyand]

Just seen this depressing response from the lenders

[murf]

In some countries they have far longer mortgages where you are expected to pass it on when you die and the next generation takes up payments.....

Many countries (including much of Western Europe I think) don't have the tradition of home ownership that we do. People seem to expect to be able to own their own home now, almost as a 'human right' where it used to be just a dream for many. Times change and people get upset when it doesn't work out how they want or as easy as they want.

Also wasn't always the case here. I know my parents were thought to be mad when they bought their house when they married in the early 60s.

[Darbyand]

In some countries they have far longer mortgages where you are expected to pass it on when you die and the next generation takes up payments.....

A modern day take on feudalism.

I get your general point BUT something has gone very wrong that house price vs ave salary has become so far out of kilter. NIMBYism, excessive planning, greedy home builders all in the mix but at the heart of it, successive governments have passed the buck on this and in many instances encouraged people to view their homes as future inheritances.

[murf]

In some countries they have far longer mortgages where you are expected to pass it on when you die and the next generation takes up payments.....

A modern day take on feudalism.

I get your general point BUT something has gone very wrong that house price vs ave salary has become so far out of kilter. NIMBYism, excessive planning, greedy home builders all in the mix but at the heart of it, successive governments have passed the buck on this and in many instances encouraged people to view their homes as future inheritances.

The main issue is 'expectation'. Not just the ownership thing I already mentioned but also the increase in (demand for) smaller households. We need more housing (and prices rise accordingly) because people want to live in smaller groups whether as owners or renters (i.e. not with parents or house-sharing etc). The ratio of houses to population is increasing steadily (he says without checking stats).

House prices are also only really bonkers in areas of high demand. Again because of the 'expectation' of people wanting to live in the most sought out areas. (As an aside this is probably shifting from cities like London and suburbs to greener areas as people can work from home and not commute).