Do people think interest rates are going to get very high?

[colosmbo]

Have sold but now panicking as will have to pay over the odds for anything I buy. Will have an ok LTV ratio & will fix for 5 years but I'm anxious what things will look like at the end of the 5 years. Obviously no one has a crystal ball but all the agents keep telling me they have never seen anything like the market now, cost of living crisis & I read today banks are starting to tighten up their lending. It's all making me panic & unsure if I should wait. We fortunately can live with family so won't pull out of my sale.

True dat

If interest rates are higher( and house prices fall as a result) but you have managed to pay off a big chunk of the mortgage through overpayments, does it make it easier to upsize?

How was it like the 70s?

House prices falling... For 95% of the country, just can't see it happening in any significant way.

@SD25 house prices have fallen slightly/been stagnant in my area of London except for the £1 million houses (according to the FT, its because they are less linked to affordability calculations/cost of living etc). Which is what enabled me to buy in the first place. I am not aiming to upgrade to a £1 million house, but a 3 bed flat/townhouse (from a 2 bed flat).

Interest rates are (currently) a policy tool to moderate inflation from the demand side by controlling the money supply. There is a fundamental assumption that inflation is caused by too much money chasing goods and services.

The inflationary pressures we're seeing at the moment are largely caused by supply side constraints driving up input costs, and they are both national and global in nature. Prices will not be controlled simply by British money becoming more expensive.

I fail to see how higher interest rates will really affect prices for food, energy, goods and services, but they will kill discretionary spending and increase the risk of stagflation.

I'd be much more concerned about banks tightening their lending criteria, either through LTV ratios, stress-testing borrowers' finances or both.

@desiringonlychild2022 same for my part of London. The only people I know buying the 1m plus homes have a ton of equity cause they got on the ladder yrs ago &/or family help.

@colosmbo

hi

i was just wondering how you were getting on?

I still can't find anything to buy (affordable & in my area). I've fixed for 5 years @ 2.48 where I am, so will see what happens. I'm happy enough to port my mortgage with my lender IF I find something I want to buy.