oh dear™: UK house market is ‘heading for crash’

[AtW]

Money is cheap, unless inflation rises and interest rates have to rise with it.

Money were cheap for the first 2 years of discount rate - people thought they would just go elsewhere and get 2 more years of cheap money, now that the rates are up and they won't get new morgage because banks don't want to lend to riff raff those people will have to pay much higher morgage - 50-70% higher in many cases.

[beaker]

As someone wise once said, "the market can stay overvalued longer than you can stay solvent". Or something like that. Not really sure what they're on about now I think about it... anyway...

[sasguru]

Money were cheap for the first 2 years of discount rate - people thought they would just go elsewhere and get 2 more years of cheap money, now that the rates are up and they won't get new morgage because banks don't want to lend to riff raff those people will have to pay much higher morgage - 50-70% higher in many cases.

Provide evidence and sums for the 50-70% figure, please ....

[Bagpuss]

Money is cheap, unless inflation rises and interest rates have to rise with it.

The inter bank rate isn't as cheap anymore, and that's what counts, irrespective of the BoE base rate. Lenders are not just avoiding sub prime markets, soon only those with top credit ratings will have access to cash.

At least good old Capital One just lent me 15k on 0%

[sasguru]

soon only those with top credit ratings will have access to cash.

I knew my boring, frugal lifestyle would pay off one day.

[Xenophon]

I knew my boring, frugal lifestyle would pay off one day.

Yes, but surely borrowing (and paying back on time consistently) helps boost up your credit rating? Was what I heard, anyway.

[Xenophon]

Oh yes - AtW - nice to see that you are posting the same stuff as ever!

[AtW]

Provide evidence and sums for the 50-70% figure, please ....

It's not my estimate - but here is how it works: people who took morgage 2 years ago were taking at the time of 4.50% interest rates, they had them fixed for initial period of 2 years or maybe even 3 - now official rate is 5.75%, but banks are pushing morgage rates higher because of sub-prime losses, also they won't give credit now to all of the customers who could get it elsewhere, so those who come off initial cheap period of credit will not be able to move and will have to pay 6.75% or higher - this is 50% increase on 4.5%, some subprime chaps will certainly have to pay above 7%.

[AtW]

Oh yes - AtW - nice to see that you are posting the same stuff as ever!

I will stop when I buy a house

[sasguru]

Yes, but surely borrowing (and paying back on time consistently) helps boost up your credit rating? Was what I heard, anyway.

I've had 5 flawless mortgages all paid off and I use my credit card but generally pay back the balance each month. And years ago 2 loans. Adn I'm on the electoral roll.