Interest rates going up soon...
Discussion
markcoznottz said:
No chance of big wage inflation with open borders, and an almost limitless supply of young men into trades with low barriers of entry.
Exactly so given we have a cost of living crisis pray tell if wages are not increasing just where does the extra needed to pay for mortgage come from? If your answer is hard luck or similar get real.
Welshbeef said:
markcoznottz said:
No chance of big wage inflation with open borders, and an almost limitless supply of young men into trades with low barriers of entry.
Exactly so given we have a cost of living crisis pray tell if wages are not increasing just where does the extra needed to pay for mortgage come from? If your answer is hard luck or similar get real.
Increase pay and all that happens is that prices increase thus negating the pay increase.
Break down the components of the costs of living and the elephant in the room is that there is only one single defining constituent and that is the cost of housing.
The only way to reduce the cost of living is to reduce the value of housing. Nothing else at all is anything other than a bodge or smoke and mirrors. You can't plane minimum wage, immigrants, tax, youths or anything. The one single issue is the cost of housing.
Halve the cost of housing and you'll decimate the cost of living.
So why is everyone so keen to do absolutely anything to avoid cutting the value of property?
Err because most of us owe the bank lots of cash and if the asset that's secured against halves the bank will need much more capital from us so the cost of borrowing would go up massively and we would be back to credit crunch times. Also house building would take a hit as profits fell causing job losses, rents would rise and overnight your back at square one.
Err because most of us owe the bank lots of cash and if the asset that's secured against halves the bank will need much more capital from us so the cost of borrowing would go up massively and we would be back to credit crunch times. Also house building would take a hit as profits fell causing job losses, rents would rise and overnight your back at square one.
DonkeyApple said:
Cost of living isn't driven by pay but prices.
Increase pay and all that happens is that prices increase thus negating the pay increase.
Break down the components of the costs of living and the elephant in the room is that there is only one single defining constituent and that is the cost of housing.
The only way to reduce the cost of living is to reduce the value of housing. Nothing else at all is anything other than a bodge or smoke and mirrors. You can't plane minimum wage, immigrants, tax, youths or anything. The one single issue is the cost of housing.
Halve the cost of housing and you'll decimate the cost of living.
So why is everyone so keen to do absolutely anything to avoid cutting the value of property?
Ok so half the asset value and double the interest rates - result that element of cost of living doesn't decrease, if base rate went from 0.5% to 5% that's a ten fold increase. Increase pay and all that happens is that prices increase thus negating the pay increase.
Break down the components of the costs of living and the elephant in the room is that there is only one single defining constituent and that is the cost of housing.
The only way to reduce the cost of living is to reduce the value of housing. Nothing else at all is anything other than a bodge or smoke and mirrors. You can't plane minimum wage, immigrants, tax, youths or anything. The one single issue is the cost of housing.
Halve the cost of housing and you'll decimate the cost of living.
So why is everyone so keen to do absolutely anything to avoid cutting the value of property?
Also as base rate goes up all that debt the govt has suddenly cost a whole lot more result we either cut more spending or increase taxes. Who actually wins?
DonkeyApple said:
Welshbeef said:
markcoznottz said:
No chance of big wage inflation with open borders, and an almost limitless supply of young men into trades with low barriers of entry.
Exactly so given we have a cost of living crisis pray tell if wages are not increasing just where does the extra needed to pay for mortgage come from? If your answer is hard luck or similar get real.
Increase pay and all that happens is that prices increase thus negating the pay increase.
Break down the components of the costs of living and the elephant in the room is that there is only one single defining constituent and that is the cost of housing.
The only way to reduce the cost of living is to reduce the value of housing. Nothing else at all is anything other than a bodge or smoke and mirrors. You can't plane minimum wage, immigrants, tax, youths or anything. The one single issue is the cost of housing.
Halve the cost of housing and you'll decimate the cost of living.
So why is everyone so keen to do absolutely anything to avoid cutting the value of property?
. Remember all the additional stuff that we can't avoid, council tax, insurances, food, utilities, all of which will rise in the future. Plus Cleggeron's 299+ tax increases since 2010, taking your point about inflation why was it so low during the boom? Houses excepted. DonkeyApple said:
So why is everyone so keen to do absolutely anything to avoid cutting the value of property?
I suspect the banks are still holding a lot of debt that would really rather not mark to market. The property boom is illusory. It has only happened in London. If you've funded a apartment block in Sunderland or a trading estate in Manchester at the peak of the boom, you really, really don't want to see the value of that fall further. Thrown in tighter solvency rules like Basle 3 on the back of the credit crisis, and you still have banks wanting to stare at the ceiling and hope that no-one is looking at them too closely...
toppstuff said:
DonkeyApple said:
So why is everyone so keen to do absolutely anything to avoid cutting the value of property?
I suspect the banks are still holding a lot of debt that would really rather not mark to market.Essentially making housing cheaper would be very easy but it's not in most peoples political or personal interests.
speedy_thrills said:
Not overlooking a large chunk of household wealth has been ploughed in so changes to value can alter spending behaviour.
Essentially making housing cheaper would be very easy but it's not in most peoples political or personal interests.
Also the key issue is huge demand and lack of supply. Essentially making housing cheaper would be very easy but it's not in most peoples political or personal interests.
We have had 6 million people migrate in net inwards and yet house building has been below the level required to sustain the previous population.
Solve this and prices will not keep rocketing don't... And the issue continues.
Welshbeef said:
Sounds like 5% can be expected within a decade as per the media this morning
Is a decade foreseeable http://online.wsj.com/articles/boes-carney-says-ra...
UK interest rates 'could return to 5% in long term'
Interest rates could rise to 5% in "the very long term", a senior Bank of England figure has said.
Sir Charlie Bean, deputy governor for monetary policy, called it "reasonable" to think rates would return to pre-recession levels in 10 years or more.
The rate was cut when the financial crisis hit the UK from 2007, and it has remained at 0.5% since March 2009.
Bank of England governor Mark Carney has said it could now rise, possibly to a "new normal" of 2.5% by 2017.
In an interview with Sky News, Sir Charlie, who will step down from his Bank of England role on Monday, was asked if the interest rate could return to 5% within 10 years.
"That may well be so. I wouldn't want to say it will be back there in 10 years," he said.
"It might be reasonable to think that in that very long term you would go back to 5% but it's probably quite a long way down the road."
http://www.bbc.co.uk/news/business-28077154
my granny could have said as much - and she's been dead for 25 years
Interest rates could rise to 5% in "the very long term", a senior Bank of England figure has said.
Sir Charlie Bean, deputy governor for monetary policy, called it "reasonable" to think rates would return to pre-recession levels in 10 years or more.
The rate was cut when the financial crisis hit the UK from 2007, and it has remained at 0.5% since March 2009.
Bank of England governor Mark Carney has said it could now rise, possibly to a "new normal" of 2.5% by 2017.
In an interview with Sky News, Sir Charlie, who will step down from his Bank of England role on Monday, was asked if the interest rate could return to 5% within 10 years.
"That may well be so. I wouldn't want to say it will be back there in 10 years," he said.
"It might be reasonable to think that in that very long term you would go back to 5% but it's probably quite a long way down the road."
http://www.bbc.co.uk/news/business-28077154
my granny could have said as much - and she's been dead for 25 years
Welshbeef said:
rover 623gsi said:
Welshbeef said:
Sounds like 5% can be expected within a decade as per the media this morning
you mean something is going to happen at some point during the next ten years? Wow! Hold the front page!!!Given that the economy is just as f
ked as it was five years ago its unlikely that interest rates will increase much soon.
And yet there is an inflationary upward trend in property prices. That's supply and demand working. Even if you are piss poor you still need somewhere to live. Demand is the same economy fked or not.
ked as it was five years ago its unlikely that interest rates will increase much soon.And yet there is an inflationary upward trend in property prices. That's supply and demand working. Even if you are piss poor you still need somewhere to live. Demand is the same economy f
ked or not.
They can't predict what will happen in six months never mind 10 years!
I understand why they're doing it though. Just to try and calm the market and show they're issuing some kind of guidance.
All these experts never predicted the crash, or any crash, so I don't see how they can predict what will happen that far ahead.
I understand why they're doing it though. Just to try and calm the market and show they're issuing some kind of guidance.
All these experts never predicted the crash, or any crash, so I don't see how they can predict what will happen that far ahead.
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