MORE Pain For Housing Market As Interest Rates Hiked 0.5% To 5% In The UK, With Further Rate Rises To Come From Bank of England
MORE Pain 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.
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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.
Watch full video – https://youtu.be/Xw8cYNnlrn4
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
Housing Market in DEEP Trouble: https://youtu.be/USGREwntT1I
Interest Rates Will Rise, Property Prices Will Fall And Opportunities Will Open Up:
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