MORE Trouble For Housing Market
As Interest Rates Rise by 0.5%
The Bank of England
have hiked base interest rates for the 13th time by 0.5% to 5% causing more
misery and pain for beleaguered homeowners and further downward pressure on
house prices.
The governor of the
Bank of England, Andrew Bailey, said they have not ruled out further interest
rate rises, pouring further anxiety on homeowners already struggling to meet
the payments and cope with higher food prices and living costs.
The markets are
already factoring in a base rate of 6%, which would be disastrous for
mortgages and house prices as borrowing becomes unaffordable for residential
and buy-to-let property investors.
Buy-to-Let
property deals no longer stack up at higher rates.
The average 5-year
fixed rate mortgage is near 6%, but some borrowers were already facing 6-7%
interest rates before this latest rate rise. Could we see a return of a 10%
mortgage?
The housing market
has already started to slow down, and this will add further stress to
affordability as lenders have pulled thousands of mortgage products already.
One economist said
that 50% of borrowers holding fixed-rate mortgages have yet to renew.
In January the FCA
warned that, as many as 750,000 homeowners face default, which means
they could be repossessed and lose their homes.
The Bank of England
and the various men in grey suits that run the markets say that getting
inflation down to 2% is their number one priority.
They are sucking
billions OUT of the economy, making us all poorer with less money to spend so
that demand falls – eventually causing inflation to fall. In effect, they are
putting the country into recession, which means ordinary people will LOSE their
jobs and businesses – Andrew Bailey, who helped CAUSE inflation by printing
billions of pounds, will of course keep his job.
According to the
IFS Institute of fiscal studies, 1.4 million homeowners will see a fifth of
their disposable income disappear due to interest rate rises. That means less
money to spend on going out, cars, houses and more money filling up the coffers
of the banks!
The Bank of England
have consistently maintained that inflation was “transitory”. The governor also claimed that inflation will
be down to 2% by the end of the year, another one of his so-called “moving
forecasts” (a forecast they can make up as they go along), no doubt.
Good luck with that
Andrew. This level of inflation can take years to beat, and the average time it
takes inflation to come down from over 8% to 2% is 14 years, according to a former
Bloomberg economist.
Another man in
grey, the former Chancellor Norman Lamont, said a recession would not be too
bad! How will it be for you Norman? Do you have a mortgage?
Lamont was in
charge during the ‘Black Wednesday’ sterling crisis when the UK lost £5 billion
when George Soros ‘broke the pound’ and interest rates went up twice in one day
peaking at 15%, and going back to 10% the next day!
For the last few
years, lenders have had to stress test mortgage applications to see if
borrowers could afford the mortgage at a higher interest rates. This is all
fine when living costs are not going through the roof. The cost of everything
is going up by between 10% and 20% and will NOT be coming down anytime soon
even if inflation slows.
House prices have
been rescued by rate cuts and money printing in 2008 after the banks collapsed,
and again 2020, but prices and transactions are now falling in the UK and in
many other western economies.
Finally, spare a
thought for Turkish people. The government has just hiked rates by 6.65%!
So what can you
do to survive?
The government have
met with the major lenders today. The banks have agreed to help borrowers by
allowing product switches to interest only among other measures to be released.
Your credit file will not be affected in the first six months.
Here are my money
survival tips:
·
Talk to your lender – don’t bury your head in
the sand.
·
Rent a room scheme.
·
Get a part-time job.
·
Learn how to manage your money.
·
Learn how to invest and grow your money into
wealth.
See: – Transfer
Property Into A Limited Company Without Paying CGT or Stamp Duty https://youtu.be/mtGq7WaVxLA
See also:
Housing Market in
DEEP Trouble: https://youtu.be/USGREwntT1I
Interest Rates Will
Rise, Property Prices Will Fall And Opportunities Will Open Up:
https://www.youtube.com/watch?v=ziTf2jOagB8&t=179s
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·
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