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Is Sheffield property market moving again?

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Lack of supply comes down to people being unable to sell as they are at high loan to values on their house and do not have the deposit for the next step in the ladder, or first time buyers being basically wiped from the market due to inavailability of very high LTV products. High LTV pruducts are coming back on the market and rates are reducing on them (this is a large part of the recovery).

 

Skipton Building Society has raised it's SVR rate by nearly 1.5%. This is the sign of things to come if the BOE raises the base rate, which looks very likely in the next 4-6 months.http://www.dailymail.co.uk/news/article-1244884/Skipton-Building-Society-raises-mortgage-charges-1-500-sparking-fears-hike-many.html. This scenario will leave many people with no choice but to sell as they won't be able to keep up with their repayments. It won't matter whether they can move up the ladder or not, if you can't pay your mortgage you have to sell your property. More forced sellers will drive house prices down.

 

Ok ok, I can't say for sure what prices are going to do and neither can you (otherwise you'd be out there shorting REIT's right now and "making millions"). What I can tell you is there not going to dip a huge amount more (if they do) and there are some genuinely good value properties to be had atm..

 

You dismiss my arguments with the old 'nothing is certain but death' cliche but then announce your own prediction as an almost certain guarantee, without even providing any reasoning to it. What reasons do you have as to why you think prices are not going to dip a huge amount more?

Edited by Dimitri 11

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There's nothing that looks like good value compared to the prices at the start of the decade. 'Good' value is only when compared to the recent heights.

Houses are still over valued by most historical measures.

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Skipton Building Society has raised it's SVR rate by nearly 1.5%.

 

Yoy can't win with these lot,my son was with the Skipton tied in so when the base rate was low he was still paying high,his deal came to an end in Dec and hey presto they bung it up.

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Hi Dimitri,

 

The Bank of Englands decisions are made by the government (whether they'll admit to it or not), the BOEBR will not be going up v soon simply through fear of it sending peoples mortgages on Trackers, SVR's etc through the roof. At the end of the day the government own half these banks, why on earth would they force the failure and reposession of these homes and turn what they deem as "bad debt" into actual bad debt. They're going to have to tread very carefully.

 

As you may or may not know Building Societys do not borrow huge amounts from the BOE or the Wholesale Money Markets and cannot rely on cheap LIBOR funding etc, instead they use their savers money to distribute as loans. Because of this they have savers who wont be happy with such a low interest rate on their savings, the only way to counter this is to increase the mortgage rates they charge. Things are different with Banks.

Edited by TediRuckspin

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There's nothing that looks like good value compared to the prices at the start of the decade. 'Good' value is only when compared to the recent heights.

Houses are still over valued by most historical measures.

 

However you cant compare house values 10 years ago with house values today. The value of the pound has also changed.

 

Affordability based on average wage and average house price is a far better indication.

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I expect the BoE base rate to have gone up within 3 months, particularly if inflation figures are high again next month.

 

Phylis - it's a very easy calculation to work out the change in the value of the pound.

But I agree, the average cost compared to average wage is a good indicator, and we are still above the historical average for that comparison.

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It is and it is currently the lowest price wages ratio since 2002 from memory.

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I'm bowing out of this one now, like I said make the right decision for you at the time, make sure it's affordable and the very best of luck to all.

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Skipton Building Society has raised it's SVR rate by nearly 1.5%. This is the sign of things to come if the BOE raises the base rate, which looks very likely in the next 4-6 months.

 

This looks to me like something specific to Skipton, e.g. they want to reduce their lending so don't care about attracting new borrowers, but do see an opportunity to attract new savers. They're advertising a 5-year bond at 5.01%, which I think is pretty competitive.

 

I don't think we can conclude from Skipton's rise that a BOE base rate hike is imminent. Plenty of commentators have suggested that it will stay at around 1% or less for at least another year, and stay fairly low for several years after that (but there's a lot of uncertainty about). As long as inflation doesn't get out of control, the recovery is weak, and there are buyers for gilts, rates will stay low.

 

Of course, interest rates will have to go up eventually. If you're on a low rate now, this is your chance to pay down your debt.

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I expect the BoE base rate to have gone up within 3 months, particularly if inflation figures are high again next month.

 

If there is a rise on the way (which i think pretty unlikely), it certainly wont be this side of the next election.

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Inflation is above the target already and got there unexpectedly. The sole responsibility the BoE has with interest rates is to control inflation.

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The Bank of Englands decisions are made by the government (whether they'll admit to it or not), the BOEBR will not be going up v soon simply through fear of it sending peoples mortgages on Trackers, SVR's etc through the roof. At the end of the day the government own half these banks, why on earth would they force the failure and reposession of these homes and turn what they deem as "bad debt" into actual bad debt. They're going to have to tread very carefully.

 

If inflation spirals out of control it surely won't matter where the BOE would like interest rates to be, they will just have to raise them.

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