6% mortgage rates; trouble a'ht Mill

[Twiglets1]

This is a new 6% mortgage rates thread as the last one is almost full.

Thanks to KievLoverTwo for suggesting the second part of the title to reflect all the squabbling these threads are causing. Which could be a thing of the past of course. But realistically, it won't be.

https://www.bbc.co.uk/news/business-67262339

Should you fix your mortgage now as base rate held at 5.25%?

https://www.moneysavingexpert.com/news/2023/11/base-rate-held-savings-mortgages/

Consumer price inflation (CPI) - latest figures will be released next week on the 15th November.

The BoE forecasts that it will continue to fall from the peak at 11.1% then 6.7% in September to 4.8% in October. And a further small fall will be announced in December.

I linked to this on another thread but an interesting piece by the economics editor of the Guardian here, suggesting that the next interest rate move is downwards! Will be interesting to see if that is the case.

Next CPI announcement, as you said @Twiglets1 when we will see what inflation was doing in October is 15th November and the next BoE interest rate decision is a month after that on 14th December.

https://www.theguardian.com/business/2023/nov/02/despite-the-bank-of-englands-hawkish-tone-the-next-interest-rate-move-is-likely-down

I am expecting to see a small fall next time the BoE base rate changes, though I wouldn’t expect that to happen until 2024.

Many financial experts are expecting mortgage rates to slowly fall in the coming months. Down to about 4-4.5% by the end of 2024/early25.

They will follow the U.S to avoid a run on the pound that would make the Truss debacle look like the Teddy Bears Picnic. Dont bet the mortgage on forum posters wishing that economic reality would go away, or "experts" who get paid just to write something every week, and will write whatever suits the prevailing mood on that particular day and change their opinion the next day depending on the economic mood that day! Always DYOR, my advice is, if you have a mortgage fix, dont try to game the bond markets/interest rates, they will eat you quicker than the shark from Jaws if you get it wrong (just ask anyone coming off a five or two year fix right now) If you dont have a mortgage, dont get one, wait for interest rates to do their work of bringing prices down, why should you borrow extra to bail someone less cautious out of their debt mistakes?

https://markets.businessinsider.com/news/stocks/stock-market-news-today-economy-fed-inflation-interest-rates-outlook-2023-11

I do agree with you Crashy that people should always do their own research not base important economic decisions on what individual people on forums say or people post on YouTube channels.

Yes, that is why I pay attention to the bond market not posters on forums (or YouTube videos reeling off things that were covered on HPC years ago and now coming to fruition) The link I posted is dealing with the reality of the U.S continuing to raise rates as global inflation has not gone away.

https://www.theguardian.com/commentisfree/2023/nov/07/rba-interest-rates-decision-hike-rise-why-inflation

I think the Fed are terrified of getting it wrong on inflation (like the 90s) and will hike some more, UK will just have to follow them, you shouldnt confuse banks trying to get market share (mortgage applications down 40%) with teaser rates and the reality of how mortgage debt is priced, the "Ten Year Yield" ultimately dictates how much you mortgage is going to cost.

Well we agree on some things but not others Crashy.

I don’t think the U.K. will hike rates but we’ll see. Time will tell, I guess.

Fair enough, Thursday is the next big day to watch (especially if you have big mortgage or other debts) maybe it will lead to yields plummeting..... or maybe not?

@CrashyTime the latest talk I have seen is the Fed will hold rates because they are worried about a lower number of job opportunities. What makes you think they will raise it again?

Britain’s housing market is past “peak pain” and prices look likely to bottom out by next summer, according to the estate agency Savills.
The average UK house price is projected to fall by 3% in 2024, after a 4% drop this year, the upmarket estate agent and property advisory firm said in its five-year outlook.
Prices held up slightly better than expected in 2023, according to Savills. Property values are estimated to be down a total of 7% since the autumn of last year to the end of 2023.
Savills expects the Bank of England to start cutting interest rates in the second half of 2024, reducing its base rate to 4.75% by the end of that year, from 5.25% now. The property company forecasts rates will fall to 1.75% in 2027.

UK housing market is past its ‘peak pain’, declares Savills (msn.com)

I think Savills are setting their 5 year budget. Pencilling in house price rises for 2027 & 2028 at a specific percentage are speculative at best. I guess they are basing this on much lower interest rates.

Lets just say house prices rise at about 2%pa in real terms over a long term.

The actual FED didnt say that though? It was some "expert" (who probably has a big mortgage) waffling away about their personal wish list? The FED always say they are "data dependent" and the "door is still open to rate rises" etc.etc. which leads me to believe that they wont hesitate to raise if inflation looks like spiking or persisting. There are a lot of articles at the moment saying that the inflation fight is far from over (Australia just raised rates again after a pause) and that housing/rent costs in the U.S still need to be "tamed" because those numbers are feeding into higher general inflation numbers. One viewpoint on why they might not need to raise rates again is that the bond market might do the work for them, the "Ten Year Yield" runs mortgage rates and if that rises mortgages get more expensive even if the FED holds.

LOL, Baker says "Buy Bread....It ts Great value!"

Did Savills get their rate predictions right on the way up, or were they saying "2.5% will be the top" like the other "experts"?

Anyone banking on a cut in base rates is whistling in the wind. It'll only happen in the next year if the BoE fears a big recession and then all bets will be off anyway.

I can't remember who it was; some organisation or other that wasn't the Fed, I don't think it was a housing market speculator, maybe an economist.

Yeah, I kinda share your outlook that things are looking bleak, and tbh, it doesn't really feel as though not raising the base rate is something they'll be able to avoid in the future; maybe not immediately, maybe in summer.

But then they go and throw a spanner in the works and say stuff like 'we're worried about a slowdown of business growth/an increase in unemployment, so we're not raising anything', and I don't have a friggin clue what direction they may take in the future.

I don't think I've really been following the economics of this system for long enough to really be taking an educated guess these days. There are a lot of people out there a lot smarter than me who keep getting it wrong.

I just know the short term outlook (for, say, a year) pretty much globally, is looking really quite bleak.

I don’t know what you’re on about half the time Crashy, probably because you talk in riddles. What’s this about buying bread it’s great value? Is anyone saying Buy property it’s great value? I don’t think so, even assuming I’ve got the right metaphor.

I`ll simplify; An Estate agent is saying "Please keep viewing and offering on property because you will get a great deal when rates start coming down sometime in the future that no one can really predict"

I think they should just leave rates where they are now and let things play out, but of course that isn`t how inflation works, especially if it become "embedded" and especially if central banks were too late to start raising because they were too focussed on protecting a massive consumer debt bubble.

https://www.theguardian.com/business/live/2023/nov/08/ms-posts-better-than-expected-75-jump-profits-house-prices-niesr-jeremy-hunt-autumn-statement-lloyds-slavery--business-live?filterKeyEvents=false&page=with:block-654b9bc18f08098a8706f5ee

It’s all speculation at this stage @XVGN but time will tell. I wouldn’t bank on the BoE cutting the base rate next year either but that’s the way I would bet if I was a betting woman. People can disagree that’s fine, it’s just personal opinion as far as I’m concerned.

I surprised to see you saying rates should be kept where they are now @CrashyTime it wasn’t very long ago you were gleefully forecasting that they were going to go a lot higher.

Maybe now you think them staying at 5.25% is preferable to the “risk” as you see it of them going down instead of up?

We (no mortgage and little mortgage) don't have as much skin in the game as our kids. I'd hate for people to be buying and paying inflated prices with a hope of lower mortgage rates to come. I'd really caution people to prepare for higher rates and not proceed unless they can afford them.

"I'd hate for people to be buying and paying inflated prices with a hope of lower mortgage rates to come. I'd really caution people to prepare for higher rates and not proceed unless they can afford them."

I agree with this 100% and think it is great advice. Sales volumes stats show that people are definitely heeding this advice.

https://www.plumplot.co.uk/South-East-property-transactions.html

I agrée with @CrashyTime they need to stay for a few months as they are, need ti let it work into the system a bit, more people come off their fixes etc. See what happens and then they can decide if they need to go up more (or down but that's v unlikely in my opinion)