Comments on: Negative Real Interest Rates http://www.mortgageguideuk.co.uk/blog/uk-housing-market/negative-real-interest-rates/ Simplifying Finance, Housing and debt Fri, 10 Feb 2012 11:38:14 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Money for nothing: a new era of zero interest rates? | MetaFilter http://www.mortgageguideuk.co.uk/blog/uk-housing-market/negative-real-interest-rates/comment-page-1/#comment-1850 Money for nothing: a new era of zero interest rates? | MetaFilter Wed, 12 Nov 2008 22:19:14 +0000 http://www.mortgageguideuk.co.uk/blog/?p=321#comment-1850 [...] Today almost every nation in both the developed and developing worlds is deeply in the territory of negative real interest rates. In other words, savings kept dormant in the bank loses, rather than gains, value. As the long [...] [...] Today almost every nation in both the developed and developing worlds is deeply in the territory of negative real interest rates. In other words, savings kept dormant in the bank loses, rather than gains, value. As the long [...]

]]> By: Jason Hurley http://www.mortgageguideuk.co.uk/blog/uk-housing-market/negative-real-interest-rates/comment-page-1/#comment-1647 Jason Hurley Mon, 18 Aug 2008 12:35:32 +0000 http://www.mortgageguideuk.co.uk/blog/?p=321#comment-1647 Everyone’s talking about the current state of our economy at the moment. Will we head into recession? Are we already in one? Whats my property worth? Will I be able to remortgage? What rate will I be looking at? How bad are things going to get? The government, the Bank of England, the FSA, mortgage lenders, building companies will all tell you their side of the story, often with very conflicting views. I thought it would be a good time to write and tell you all what I think is happening given what I’m seeing, reading and experiencing on a daily basis. Its a nightmare!! Ha! No. It’s not that bad really. As long as in the short term you are able to hold onto your job. There’s many factors at the moment that have to be taken into account when trying to work out the economical future of the country. Property prices, oil and food prices, inflation, Mortgage rates and inter bank lending rates are some of the factors that need to be taken into account. It all seems to also be centered around the property market and property is a good gague of how we are doing. Everyone is talking about house price crashes and things continually getting worse. Which they will. But house prices have already crashed. The true drop however has not been realised yet as the figures are fudged due to not many properties selling. Inflation is on the up so the normal thing for Mervyn King to do would be to put the base rate up. This would probably only cause more problems however. Not a good idea as then borrowers would be in more trouble and we would all be embarking on a very slippery slide. They should hopefully stick at 5% for a while longer while the dust settles. The credit crunch problem is caused by the lenders being so tight with their money. They are fuelling the whole scenario as they are unsure of the losses that they have already incurred. In the past when mortgages were written and sold the lenders could sell on their mortgage books to other companies. They can’t do that anymore as no lender feels safe buying another companies books that could be full of mis-sold mortgages. They don’t even know exactly what business they have on their own books let alone the books of another company. For this reason the lenders refuse to lend to eachother. This means they each have less money to lend to you. It’s easing up though. The lenders are slightly less cautious already and some are offering one off products for short amounts of time to get in good business. Then they close their doors again. I can find these rates for you. ) When the lenders are happier that properties have close to bottomed out they will reduce their rates significantly and start lending again as lending will be far less risky. They also as mentioned earlier need time to see what bad business mortgages they have on their current books to assess their real financial situation. We should see about another 15% drop in house prices between now and April and next year, hopefully then we’ll see house prices stabilise and start moving up again in value. As confidence in the property market increases the builders will be back to work along with many other professsions linked to property. The knock on effect will gradually reach all businesses and the frequency of redundancies should begin to fall. If you’re looking to buy at the moment my advice is to put crazy offers in. You’ve got nothing to lose. You’ll lose money on the rate as they’re pretty high but you will save money on the price. There are some real bargains out there and if you’ve got good income and a good deposit it’s a great time to buy. If you are looking to sell. Good luck and take what you can while you can. If you have got time to wait and do the place up you could be onto a winner. Builders are feeling the crunch and you should be able to negotiate your price. If you are looking to go into negative equity act now before you do and get an extension done to improve the value of your home to curb it. 100% borrowing and above is a thing of the past. Try to remain in the green. I hope this is helpful. If you want to keep receiving updates such as this one please become a fan of Hurleys Mortgage & Financial Solutions please click on www.hurleysfinancialsolutions.com and goto enquiry online. From there you can request information and advice or leave your contact details for calls/mailings. I will then be able to keep you up to date with any changes and other information on the mortgage and property market that could be of interest to you, or that you specifically require. I look forward to hearing from you. Jason Hurley BSc Hons FPC, CeMAP Everyone’s talking about the current state of our economy at the moment. Will we head into recession? Are we already in one? Whats my property worth? Will I be able to remortgage? What rate will I be looking at? How bad are things going to get?

The government, the Bank of England, the FSA, mortgage lenders, building companies will all tell you their side of the story, often with very conflicting views.

I thought it would be a good time to write and tell you all what I think is happening given what I’m seeing, reading and experiencing on a daily basis.

Its a nightmare!! Ha!

No. It’s not that bad really. As long as in the short term you are able to hold onto your job.

There’s many factors at the moment that have to be taken into account when trying to work out the economical future of the country. Property prices, oil and food prices, inflation, Mortgage rates and inter bank lending rates are some of the factors that need to be taken into account.

It all seems to also be centered around the property market and property is a good gague of how we are doing.

Everyone is talking about house price crashes and things continually getting worse. Which they will. But house prices have already crashed. The true drop however has not been realised yet as the figures are fudged due to not many properties selling.
Inflation is on the up so the normal thing for Mervyn King to do would be to put the base rate up. This would probably only cause more problems however. Not a good idea as then borrowers would be in more trouble and we would all be embarking on a very slippery slide.
They should hopefully stick at 5% for a while longer while the dust settles.

The credit crunch problem is caused by the lenders being so tight with their money. They are fuelling the whole scenario as they are unsure of the losses that they have already incurred. In the past when mortgages were written and sold the lenders could sell on their mortgage books to other companies. They can’t do that anymore as no lender feels safe buying another companies books that could be full of mis-sold mortgages. They don’t even know exactly what business they have on their own books let alone the books of another company. For this reason the lenders refuse to lend to eachother. This means they each have less money to lend to you.
It’s easing up though. The lenders are slightly less cautious already and some are offering one off products for short amounts of time to get in good business. Then they close their doors again. I can find these rates for you. )
When the lenders are happier that properties have close to bottomed out they will reduce their rates significantly and start lending again as lending will be far less risky. They also as mentioned earlier need time to see what bad business mortgages they have on their current books to assess their real financial situation.

We should see about another 15% drop in house prices between now and April and next year, hopefully then we’ll see house prices stabilise and start moving up again in value.

As confidence in the property market increases the builders will be back to work along with many other professsions linked to property. The knock on effect will gradually reach all businesses and the frequency of redundancies should begin to fall.

If you’re looking to buy at the moment my advice is to put crazy offers in. You’ve got nothing to lose. You’ll lose money on the rate as they’re pretty high but you will save money on the price. There are some real bargains out there and if you’ve got good income and a good deposit it’s a great time to buy.

If you are looking to sell. Good luck and take what you can while you can. If you have got time to wait and do the place up you could be onto a winner. Builders are feeling the crunch and you should be able to negotiate your price.

If you are looking to go into negative equity act now before you do and get an extension done to improve the value of your home to curb it.
100% borrowing and above is a thing of the past. Try to remain in the green.

I hope this is helpful. If you want to keep receiving updates such as this one please become a fan of Hurleys Mortgage & Financial Solutions please click on http://www.hurleysfinancialsolutions.com and goto enquiry online. From there you can request information and advice or leave your contact details for calls/mailings. I will then be able to keep you up to date with any changes and other information on the mortgage and property market that could be of interest to you, or that you specifically require.

I look forward to hearing from you.

Jason Hurley BSc Hons FPC, CeMAP

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