fast bloke

ohhhh - lets see now

Jay m A

iTrader: (2)

I have an IFA already, its just nice to know whats out there coming from a different source

That is a good rate for no tie in, I wonder what March will bring?

hades

Yorkshire BS, 4.84% fixed until 28/2/11, tie in during the fixed period only (but is fully portable). The unusual thing is that it is an offset mortgage - most of those have much worse rates than "conventional" mortgages.

davyboy

Nationwide are currently offering 4.79% 3 and 5 year fixed rate deals. It's flexible, you can miss payments, pay extra money, reasonable penalties if you take the mortgage away from the.

Of course you need to be in a position to get one.

And secondly, a good mortgage adviser would not want to sell a Nationwide mortgage because they don't earn much money from it 1% I think.

Jay m A

iTrader: (2)

Thanks, I'm looking at a 4.39% discount until 30/4/8, no tie in after, portable etc through Bristol and West

fast bloke

- I would love to be getting 1% proc fees from mainstream lenders

davyboy

I'd had a beer......that does not compute......

£250 on a 135k mortgage. Yet Northern rock would pay around 3 times that!

Jay m A

iTrader: (2)

IIRC Nationwide about 7 years ago, offered 6.8% fixed for 25 years, when mgge rates were around that % people that took it are missing out now, but what about the next 7 years? (or 18 years for that matter?)

lozgti

Serious question as I can't remember how it occurred.Did anyone predict the last property crash or was it an overnight shock job?

Petem95

Some economists predicted it, and many of the same economists have predicted a repeat of the early 90's crash in the next few years, house price to income multiples have gone was above long term average.

Most of the house price stuff you see in the headlines is based on data from estate agents and mortgage lenders - so they will NEVER predict a crash, and always put a positive spin on things (as you'd expect, its in their interests!)

Things happening now are very similar to the 89-onwards crash. House prices have got absurdly high, FTB's are being priced out the market.

Checkout this graph showing UK house prices since 1952 (graph at bottom) (and note the pattern - booms are ALWAYS followed by...)

http://www.nationwide.co.uk/hpi/down..._inflation.xls

fast bloke

If you look at interest rates and house price crashes since the 1930's, price crashes have always been preceded by stiff interest rate rises. 1972, 1979 and 1989 all saw interest rates double very quickly. In each case there have been political reasons for the rate rises. Now that the rates are controlled by the BoE, it is less likely that they will mess about with the long term future of the economy for short term political gain... (not guaranteed though ) - That said, Gordon Brown can still mess about with house prices to some extent. The finalised version of SIPP's looks set to have some bearing on the property market. The main problem is that we don't know what the finalised version will be - we have already had two finalised version.

If rates stay stable then it is unlikley that there will be a crash. I can't see prices continuing at the current levels, (average price is now about 6 times average salary,) but it seems to me more likley that there will be a slow decline, as there has been over the past year until average prices come more in line with average salaries.

One of the dangers of basing forecasts on 'averages' is that those averages can be misleading. Say a 100k house in the north goes up by 10% and £million house in Chelsea goes down by 10%. There are two ways that this can be presented. One is to say that house prices are level ( (110% + 90%)/2=100%. On the other hand you can say that average prices have fallen (old average (100k+1000k)/2 = 550k, new average (110k + 900k)/2=505k which wold represent an 8% fall) - The people that make all the noise about prices are those with an interest in either seeing them rise or seeing them fall, so they will present the figures to suit their own agenda. If enough people believe the 'prices are increasing' hype then they will stay stable or increase. If more people believe the doom mongers then they will lose confidence and prices will fall. One it gets to a point where the 'prices are increasing' brigade can no longer present figures to back it up, everyone will lose confidence and prices will crash

fast bloke

Pete,
The graph only shows 1975 onwards - if you look at figures from 1952 - 1974 prices increase steadily from £1800.00 to £10,000. Extrapolating this to the current situation, house prices have been rising from an average of 50k in 1992, so they could potentially reach 250k by 2012 if the same cycle occurs.

As I said before - don't believe statistics. You can make them say whatever you want

fast bloke

To be really useful you would need a graph showing house prices, average income and interest rates. As this would have some meaning it seems no-one has produced one

Petem95

Interest rate rises arent always the trigger - look at Japan for example. Rates were something like 1% when prices crashed there (over 10years ago), and now with rates even lower prices still havent fully recovered such was the severity of the crash.

I see no reason why the same thing couldnt happen here. Prices have risen so much in such as short space of time, that as soon as it becomes apparent that prices will probably fall for a period of time, many investors will pull out of property, and the sudden flood of properties combined with nervous buyers may well trigger a crash.

MikeCardiff

iTrader: (2)

Whenever you get house price increases that are way above the rates wages increase by, you are always heading for trouble.

A good comparison would be to see in the past what the cost of the average house was compared to the average wage - at the moment the house is something like 6x the wage which as far as I know is about the highest it has ever been.

Meaning that FTB's get priced out of the market, and the few that can buy are taking on a huge debt, that could easily become unmanageable with even a small interest rate rise - add to this the fact that redundancies seem to be creeping upwards and it doesnt look good in the short term.

I can also see a lot of the recent Buy To Let investors getting burned as well - if their mortgage payments go up more than they can rent the places for, then their investment is going to start looking less attractive.

Petem95

BTL is also a sitting duck for a stealth tax. Theres too many things in favour of it, and it wont stay that way forever.

Saying that its not really viable anymore now prices have risen to such highs. The potential yields look pretty crap compared to other investments.