To ask when interest rates will likely go down?

[AnxietyLevelMax]

We are close to remortgaging for the first time. Long long time ago i was happy and excited thinking we will be paying less by £200 min per month. Right now our rate would change. We still have 5 more months before we can remortgage so we can end up paying even more than now.

how long do u think it will all last?

i dont know how we are going to do that, we cant save anything now because we are paying debts, childcare is expensive as hell, everything is expensive, we barely make it month to month paying debts off but it will still take us 1.5-2 yrs min. We have no financial cushion. I am worried as hell, cant sleep worrying if something happens we dont have any extra money.

I see. I thought you were referring to the rates rises.

I think a lot of people agree with you that prices won't fall. After all, it hasn't happened within the memory of most buyers and the government and BOE are terribly fond of manipulating things.

Let's not forget the huge intergenerational inequality & how those that can help their dc hugely. On my sisters road the last 3 flats sold including hers have been bought by parents for their dc.
I live in a fairly affluent part of London & don't know anyone who didn't have help to buy. Lots have help to move up the ladder, significant 6 fig sums.

I don't understand mortgage rates but I understand fiat currency and debt-based economies, and they always crash and it looks to me like this one is crashing. More debt is what's needed and that means squeezing people into having no option but to use debt, and to release more funds in debt just as before the 2008 crash, and we are seeing more debts being given out less mindfulness of whether it can be paid back, because it cannot be paid back because debt is created from nothing. I think this time crash is imminent. It's over. And I think social credit will replace it.

Bearing in mind historical averages I don't understand why folk feel rates won't return to around 6% or perhaps even more

I genuinely think that would be catastrophic hence why I can't see it happening. That's not to say they won't be there in a decade or so but there needs to be an adjustment.

In this climate I personally wouldn't be borrowing 5.5 x my salary with a 5% deposit but understand people who do when their repayments are cheaper then rent.

It's very cynical but I also think the lack of gov action on fuel bills is to encourage some older people (who are more likely to have a fixed income, bigger property & less efficiency) to downsize.

Well I don't live in an affluent part of London and know masses of people who haven't had help to buy and very few who have had 6 figure sums. London is a bubble, there are many other parts of the country which are very different.

The huge intergenerational inequity is a big problem. The fact that salaries have totally failed to rise with house prices is one reason why the market is going to fall now that rates are rising and the inflation rate is 10% and much higher for essentials.
@sacklunch - agree that this debt based economy is crashing under the unsustainable levels of debt.

London is a bubble
It was normal for me to pass junkies & prostitutes on my way to & from school in the part of London I was born & raised in. However it's where my immigrant parents could afford & over time enormous gentrification happened. It's certainly still not a bubble in many parts.

Don't 56% of FTBs have help. I think more FTBs left London than ever before last yr & prices in London haven't risen as dramatically in the last few yrs as other places so surely it's not just London FTBs who have help.

The fact that salaries have totally failed to rise with house prices is one reason why the market is going to fall now that rates are rising and the inflation rate is 10% and much higher for essentials.

It will be interesting to see what happens with wages as they have been devalued for so long by QE.

"Average total pay growth for the private sector was 8.2% in January to March 2022,"

Private sector is seeing some growth but not enough & obviously public sector hasn't. I assume there will be more strikes.

And the people I know who buy in my part of London with the huge help aren't originally from London.

@hatchyu - I didn't say there were no drug addicts, prostitutes or poor people in London but that it is different in many ways to other parts of the country. It is one of the wealthiest cities In Northern Europe whereas many other areas of the UK are amongst the poorest:
vividmaps.com/the-top-ten-richest-and-poorest-areas/

I have lots of family and friends in London and many of them do live in the bubble of the corporate world where everyone earns £££ and is wealthy. They make remarks about being poor because they compare themselves to others who are even wealthier. London is very different in many ways, not just financial but mainly related to this.

I agree with you that more public sector strikes are to be expected with the derisory pay rises on offer.

I'm going to guess that all these people who had help to buy in London but aren't originally from London are mostly foreigners. There are lots of, for example, Chinese and HK Chinese parents who have been buying flats with cash for the offspring. Again, this is very much London centric in the main.

No my neighbours & school parents friends are 95% white & from the home counties. Very different to my childhood where I didn't know anyone who wasn't a 2nd gen immigrant until I went to uni.

My point though was that FTBs around the country are likely getting help not just in London are FTBs purchases are the highest they've been in a while

I see. Even so, people living in the Home Counties have enjoyed the ripples of the London money. Not so in other areas as per the earlier link.

I agree that lots of FTB get help to some degree. I haven't seen any date about FTB purchases being particularly high currently. If they are, I would imagine that they are rushing to lock in low interest rates as further rises are expected. Perhaps not the wises plan.

I think we'll have to disagree on the likely outlook for the housing market and possibly we disagree on the general, in my opinion, extremely poor economic outlook for the UK.

The number of first-time buyers purchasing properties has reached a 20-year high according to the latest estimates.

This was in January & I assume more people now will be racing to lock in deals.

my opinion, extremely poor economic outlook for the UK.

Oh no absolutely agree it's going to be a shit show just don't see it leading to huge house price crash.

Oh no absolutely agree it's going to be a shit show just don't see it leading to huge house price crash.

I'm on the fence. I definitely see stagnation during to uncertainty. I can't square the buoyant employment market with recession. IMO we would have to have increased costs (inflation and interest rises), job losses (doesn't seem to be happening) and supply being higher than demand (this is starting to equalise I think).

@hatchyu - I see. I think 'the shit show' will inevitably lead to a reduction in house prices, possibly a very significant 'crash'.
We'll have to wait and see.

I think a recession is very likely but agree that the strong job market is a main reason prices will stagnate as opposed to crash. Society is unequal, it tends to be the haves who are buying property & the haves are likely to have secure jobs. And the majority will service their mortgage as a priority above everything else. Banks will extend the length of terms, switch to part repayment or interest only. But affordability will have an impact hence why I think stagnation.

The bigger shit show on the horizon is the big demographic shift coming with the ageing population.

@hatchyu

Recession will surely have an impact on the employment rate though? At some point. I think if / when that happens, we're looking at a drop in prices.

I think recession will inevitably lead to job losses, particularly in discretionary sectors which make up over 50% of the market, I believe. It could be rapid and very significant in discretionary sectors. There are already some redundancies being made in construction and tech but nothing at scale as yet.

The job market is very tight & unfortunately I think those most impacted will be younger people with more insecure jobs. As I said the people in the position to buy generally have a significant safety net.

Construction and Tech? I've heard this on the grapevine but not seen much reported.

I agree that as people tighten their belts then hospitality, leisure and personal services (beauty treatments etc) will suffer. I'm spending less in these sectors. Non essential retail too. As well as customer facing staff, these sectors have white collar staff too - accountants etc. who won't be immune to job losses just because they are professionals.

I e just had a scroll through Rightmove and there does seem to be a sudden influx of no chain (what look like) ex rentals on there. Wonder if some landlords are selling up due to the changes in evictions and proposed changes to EPCs. This could increase supply and make it less of a seller's market.

@rainingsnoring

Of course a downturn in discretionary sectors will also hit the services they use - tax accountants, solicitors etc.