The Nationwide survey shows prices down by 0.9% in August 2010 and annual inflation down to only 3.9% that is a massive fall from 6.6% in July. This is very disappointing news but at least they say in their press release that they expect interest to remain at 0.5% until well into 2011.
I am thinking that if rates remain low then at least we can pay off our debts and be in a stronger position when rates go up. Hopefully they will go up only gradually so we will have some breathing space to decide whether we can afford to hold onto the rented property. Trouble is if house prices fall too much then we will have no safety net and will be in a very difficult position.
Showing posts with label interest rates. Show all posts
Showing posts with label interest rates. Show all posts
Tuesday, 7 September 2010
Thursday, 5 August 2010
Interest Rate Held At 0.5%
The Bank of England has kept interest rates on hold as expected.
The decision by the bank's Monetary Policy Committee (MPC) means rates will stay at their current record low for an 18th month. It suggests the committee does not see high inflation as a serious concern.
Economists broadly welcomed the bank's decision, arguing that low interest rates were still needed to help the recovery in the economy, particularly with cuts in public sector spending expected to hit growth.
"While GDP growth in [the second quarter] was the strongest in four years, the data probably overstated the strength of economic activity," said Nida Ali, economic adviser to the Ernst & Young Item Club.
"And with significant fiscal tightening ahead, growth is likely to slow significantly.
"The MPC made the right decision," agreed David Kern, chief economist at the British Chambers of Commerce (BCC).
I am now fairly relaxed about the mid term prospects for low interest rates and level house prices or better. I just hope that I am not being too complacent. There seems less need to lose sleep worrying about the doomsday scenario.
The decision by the bank's Monetary Policy Committee (MPC) means rates will stay at their current record low for an 18th month. It suggests the committee does not see high inflation as a serious concern.
Economists broadly welcomed the bank's decision, arguing that low interest rates were still needed to help the recovery in the economy, particularly with cuts in public sector spending expected to hit growth.
"While GDP growth in [the second quarter] was the strongest in four years, the data probably overstated the strength of economic activity," said Nida Ali, economic adviser to the Ernst & Young Item Club.
"And with significant fiscal tightening ahead, growth is likely to slow significantly.
"The MPC made the right decision," agreed David Kern, chief economist at the British Chambers of Commerce (BCC).
I am now fairly relaxed about the mid term prospects for low interest rates and level house prices or better. I just hope that I am not being too complacent. There seems less need to lose sleep worrying about the doomsday scenario.
Saturday, 31 July 2010
July 2010
After June`s optimism July takes a downturn.
I read a report that says that house prices are expected to fall because more people are wanting to sell than buy. This is because of the effect that the Tories are having on people`s confidence and also the abolition of HIPs is making it easier to be a seller. But surely most of those people who sell will then become buyers?
I become further worried and depressed when I see BBC programme that says that interest rates will begin to rise sooner rather than later and that we should expect rates to be around 6% as that is the norm. 6% would definetely blow us out of the water and we would probably lose both houses. This is very worrying indeed.
Some good news combined with some bad news. A large accountancy firm predicts that because of the Tory deficit plans, interest rates will need to stay at 0.5% until 2014. 0.5% will become the norm. This is great news but the report also predicts that house prices will fall by nearly 25% over the next 3 years. That would be a disaster for me and my family but I don't see how anybody can predict such a big movement, it must be guess work.
Its official, according to the Nationwide house prices have fallen by 0.5% in July. Is this the beginning of a big slide? Should I start to panic now? Should we be thinking about selling our second property while we still can?
I am torn between trying to relax and take things as they come but risk being too complacent or constant worrying which seems to be a by-product of monitoring the situation closely.
I read a report that says that house prices are expected to fall because more people are wanting to sell than buy. This is because of the effect that the Tories are having on people`s confidence and also the abolition of HIPs is making it easier to be a seller. But surely most of those people who sell will then become buyers?
I become further worried and depressed when I see BBC programme that says that interest rates will begin to rise sooner rather than later and that we should expect rates to be around 6% as that is the norm. 6% would definetely blow us out of the water and we would probably lose both houses. This is very worrying indeed.
Some good news combined with some bad news. A large accountancy firm predicts that because of the Tory deficit plans, interest rates will need to stay at 0.5% until 2014. 0.5% will become the norm. This is great news but the report also predicts that house prices will fall by nearly 25% over the next 3 years. That would be a disaster for me and my family but I don't see how anybody can predict such a big movement, it must be guess work.
Its official, according to the Nationwide house prices have fallen by 0.5% in July. Is this the beginning of a big slide? Should I start to panic now? Should we be thinking about selling our second property while we still can?
I am torn between trying to relax and take things as they come but risk being too complacent or constant worrying which seems to be a by-product of monitoring the situation closely.
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