Bank of England interest rates- down they go again!

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  • Bank of England interest rates- down they go again!

    Bank of England have just cut interest rates by 0.25%

    Happy days are here again.

    ( Unless you are a saver, then unhappy days are here )

  • #2
    Originally posted by Colincbayley View Post
    Bank of England have just cut interest rates by 0.25%

    Happy days are here again.
    I wouldn't bank on it. After all, who's going to buy a house now, when every other headline is screaming at us that prices are going down?

    ( Unless you are a saver, then unhappy days are here )[/QUOTE]

    Am glad I took out that 7% fixed rate account...phew!

    Peter

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    • #3
      Originally posted by pcwilkins View Post
      I wouldn't bank on it. After all, who's going to buy a house now, when every other headline is screaming at us that prices are going down?
      That's the point. With lower interest rates the rental multipliers fit better, if no one is moving then we may get away with lower offers, and with a shortage of houses, rents will go up ( Just my view )

      As I said, happy days.....

      Comment


      • #4
        Originally posted by pcwilkins View Post
        I wouldn't bank on it. After all, who's going to buy a house now, when every other headline is screaming at us that prices are going down?


        Peter
        I hope you're wrong. I've got a house due to go on the market in a couple of weeks time. Someone just put Christmas in the way!

        There's talk of a further interest rate in January (fingers crossed).

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        • #5
          Watch LIBOR.

          The BoE base rate may become irrelevant for mortgages.

          ...or, we may be turning Japanese, as some have warned. This may not be such good news for the medium term, this time.
          Now signature free.

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          • #6
            Originally posted by lorenzo View Post
            ...or, we may be turning Japanese, as some have warned. This may not be such good news for the medium term, this time.
            I hope not. I don't like Sushi.

            Can you explain LIBOR in layman's terms. Is it something to do with what banks charge each other?

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            • #7
              Originally posted by DianeB View Post
              I hope not. I don't like Sushi.

              Can you explain LIBOR in layman's terms. Is it something to do with what banks charge each other?
              Basically, yes. It stands for London InterBank Overnight Rate.
              Now signature free.

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              • #8
                LIBOR rates are going to keep mortgages high. Its also going restrict the number of mortgages available, increase conditions and turn down many applicants.

                Despite the interest cuts in the USA house prices are still falling fast. I think the UK market has gone to far down the same path and despite the cut public confidence is low. I predict prices will still fall for some time yet.

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                • #9
                  Originally posted by lorenzo View Post
                  Watch LIBOR.

                  The BoE base rate may become irrelevant for mortgages.
                  See ==>> http://www.telegraph.co.uk/money/mai...-mostviewedbox

                  SNIP:

                  It coincided with a chilling warning from the Organisation for Economic Co-operation and Development that the UK economy is heading for a major slowdown next year - and possibly a "significant slump" in house prices.

                  This month's short sterling futures, which indicate where the market expects the key benchmark interbank borrowing rate to be in two weeks' time, actually rose markedly after the Bank's decision - an almost unprecedented reaction. The pound also ended the day up slightly on its trade-weighted index - another highly unusual outcome on the day of an interest rate cut.

                  John Wraith of Royal Bank of Scotland said: "They haven't got the control over rates in the financial system that they ordinarily have.

                  "Historically, a 25-basis point change in Bank rate would lead to an almost identical change in Libor [the benchmark rate in the money market]. That hasn't happened."
                  Now signature free.

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                  • #10
                    Originally posted by DianeB View Post
                    I hope you're wrong.
                    I might well be. It's just that if I was thinking of buying a house, I wouldn't buy one now. I read somewhere that the average house has dropped over the last 3(?) months by £5k a month. Why would I buy something today that in a year could potentially be worth £60k less? Ok, extreme example but you see my point.

                    On the other hand, perhaps it's only me who thinks like that. I have noticed a marked downturn in our area --- houses are staying on the market for months and months, whereas a while back it might be weeks.

                    Peter

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                    • #11
                      Originally posted by starlettings
                      Is not LIBOR the commercial rate that tracks base...normally plus 1%??

                      I might be wrong
                      It doesn't just "track it". It's calculated daily by the BBA. The rate depends on the time period.

                      But if the BBA think the base rate is too low, they aren't bound to stick to it. See here:

                      http://www.forbes.com/markets/feeds/...fx4416047.html

                      Peter

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                      • #12
                        Originally posted by pcwilkins View Post
                        I might well be. It's just that if I was thinking of buying a house, I wouldn't buy one now. I read somewhere that the average house has dropped over the last 3(?) months by £5k a month. Why would I buy something today that in a year could potentially be worth £60k less? Ok, extreme example but you see my point.

                        On the other hand, perhaps it's only me who thinks like that. I have noticed a marked downturn in our area --- houses are staying on the market for months and months, whereas a while back it might be weeks.

                        Peter
                        The only problem with taking that view is that you may well be wrong and properties go the other way ( Up £5K a month )

                        It is hard, if not impossible to time any investment market.
                        As they say, if you are in it for the long term......

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                        • #13
                          Originally posted by Colincbayley View Post
                          The only problem with taking that view is that you may well be wrong and properties go the other way ( Up £5K a month )
                          Yes, but my point is that it is a question of perception --- if you take any notice of the papers (and it's hard not to) you would get the impression that now is a bad time to buy.

                          But I take your point about being in it for the longterm --- if I needed a house now, I'd buy one no matter what. Just like a car or anything else.

                          Peter

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                          • #14
                            Originally posted by pcwilkins View Post
                            Yes, but my point is that it is a question of perception --- if you take any notice of the papers (and it's hard not to) you would get the impression that now is a bad time to buy.


                            Peter
                            If you took note of the papers then you will have noticed the bubble was about to burst for around 5 years .....and prob would never have bought
                            A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
                            W.Churchill

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                            • #15
                              Originally posted by Rodent1 View Post
                              If you took note of the papers then you will have noticed the bubble was about to burst for around 5 years .....and prob would never have bought
                              Hmmm possibly. But they do seem to have become noticeably more gloomy recently.

                              Peter

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