Proverbial Glow At The End Of The Proverbial Tunnel

[Evans Electric]

I say this because :-

1)    Unemployment is deemed to have dropped .     ( Stepps got himself a job :innocent   )

2)    Abandoned building projects in this area are being re-started .

3)   But the Bank of England has announced that even if unemployment plumetts , they won't raise the interest rates as

       they promised .    (  Well thanks a bunch ........Oh well , puts bankers on a par with 2nd hand car salesmen &   

       poiticians .     

 

[Sidewinder]

Thing is Deke, if they keep interest rates low it will further fuel growth as it will be cheaper to borrow, and will put off people tying their money up in bank accounts and perhaps entice them to use their money to fund real physical growth!

 

[Andy™]

We need to start a petition:

Deke for Prime Minister

then again, you couldnt get the job anyway. your not thick enough

 

[steptoe]

personally, Im very happy with the low interest rates,

means I can just about afford the mortgage and have a little bit left over.

 

[Evans Electric]

We need to start a petition:

Deke for Prime Minister

then again, you couldnt get the job anyway. your not thick enough

Yes I am ............. oh  shouldn't have said that !!

 

[binky]

personally, Im very happy with the low interest rates,

means I can just about afford the mortgage and have a little bit left over.

just make sure you plan for the inevitable rise when it comes.

 

[ProDave]

Don't forget not everyone has a mortgage :innocent

Oh and unemployment is lower this side of the border than the rest of the UK.

Steady on, we don't want to much of that. That might start making some undecided's vote FOR independence.  I would rather they continued spouting doom and gloom in the news until after September 18th.

Anyway looks like another boom is on the way. Followed no doubt in a few years by the next bust.  Now remind me who it was said they had ended boom / bust cycles?

A housing market boom in about 2 years would suit me fine.

 

[Steve3948]

Some on here will remember when mortgage rates hit 15%, how I managed in those days I don't know although working 7 days a week and loading up the overdraft helped  :innocent

 

[Technician]

perhaps entice them to use their money to fund real physical growth!

This is still the rub with this lot;  Economic recovery is STILL

linked overmuch to domestic demand and insufficient attention

is paid to industrial growth and increase of the GDP (Gross

Domestic Product)

THIS is what we desperately need to reduce the borrowing.

Ireland has just recently been redeemed from "junk" status,

but our problems will continue well up to 2019.

I heard it on the radio last night;  the Germans plan long term;

we still plan on election time frames.  NOT GOOD ENOUGH.

 

[SPECIAL LOCATION]

Some on here will remember when mortgage rates hit 15%, how I managed in those days I don't know although working 7 days a week and loading up the overdraft helped  :innocent

Black Wednesday was the day when the interest rate was changing by the hour!!!!

http://news.bbc.co.uk/onthisday/hi/dates/stories/september/16/newsid_2519000/2519013.stm

We took out our first mortgage in 1985....

interest rates were somewhere around 7% or 8% up into double figures during them early years...

BUT....

back then the average worker, earning an average wage could still put a bit of money in some savings and earn a bit of interest on those savings....

and in not to long a time have accumulated enough to be able to afford a deposit for a mortgage..

On an affordable average property in a location that suits where they would like to live...

(near work/schools/family/shops etc whatever their preferences were)...

AND the mortgage was only based on the single highest wage earner..

2.5x or 3x annual earnings ish'

and you would never ever have been give a 100% mortgage...

{side note:-

proper jobs were still available then, working full a week for decent pay..  NOT part time or "zero hours" contracts!!!!}

Now you can call me old fashioned...

BUT...

while it is still impossible for the average worker, earning an average wage to earn any significant interest on any savings...

and where they don't stand a cat in hells chance of affording a mortgage..

without signing away their life, their children, their grandmothers inheritance, and most of their future prosperity...

All this crap about unemployment coming down.....is tosh!

Its the TYPE of jobs..  NOT  the quantity that is important !

400 shelf stacker's working 18hours a week on the minimum wage is NOT

better than 200 manufacturing/skilled/trades person/semi-professional workers doing 40+ hours a week on double the minimum wage...

People need earning power so they can spend/invest/and support their loved ones!

Statistic on the news the other day about the number of youngsters still living at home...

cuz they cannot earn enough to live independently even if they do have a reasonable job!!

Light at the end of the tunnel....

My Ar5e!!!

the tunnel is still being dug...

they haven't decided when or where to exit yet IMHO!

:C

 

[Technician]

Black Wednesday was the day when the interest rate was changing by the hour!!!!

I remember this with a shiver going up and down my spine;.....

Lamont and Major having to make a statement outside No 10

and only because it was realised by those in the know that the

financial traders made it QUITE clear to the government of the

day that THEY were in charge. Collectively they conspired to

make the pound worthless on the money markets and this drove

interest rates up, IIRC, to 15% plus but only for a brief period.

Stability was only restored when Britain left the ERM.  This meant

that we were no longer in the Eurozone so when the crash came

and the PIGS (Portugal, Italy, Greece and Spain) began to squeal

it may have meant that our exposure to that fiasco was limited.

 

[Evans Electric]

I'm at a loss as to where all these people are getting jobs , and the all the immigrants who are welcomed and encouraged to come .  

When I think of all the huge employers that have dissapeared from the Midlands I can't figure where everyone now finds a job .   They can't all be at Tesco  surely. ?

 

[ProDave]

Following on from Special Location's post:

I bought my first house in 1985.  I had to scour the market to find the only building society willing to lend me 3.25 times my salary, AND that took into account a pay rise due in 2 months. That was an 86% mortgage.

At the time all the old codgers at work, who had already paid off their mortgages, could not believe how much I was paying for such a small house and with such a big mortgage.

Mortgage payments were 50% of my take home pay.  I had to tighten the belt but I managed.

What made life easier back then was high inflation, and wage rises that kept up with inflation, so in only a few years, the mortgage had dropped to a much more comfortable percentage of salary and it was time to think about moving up to a better house, which I did in 1990.

Today, you take on a big mortgage, and it remains a big mortgage for quite some time.

When you analyse it, it has never (not in my time anyway) been easy to buy your first house and it probably never will be. It's just hard in different ways today.

Some  people are no doubt in for a shock, having got used to 0.5% interest rates and now think that is "normal" and when they do go up some people will struggle.

P.S I have never thought raising interest rates was a particularly good mechanism to reduce inflation, but then what do I know.

 

[steptoe]

well, only 6 yrs ago I returned to Great Britain, and had absolutely NO credit history whatsoever here,

I took an employed job in order to build a credit rating,

6weeks later, and armed with a letter of intent with my predicted earnings [for the next 5 years] from my employer, I [and the g/f at the time] applied for a mortgage,

on my earnings alone we were offered a 100% mortgage at almost 8 times my yearly wage,!!!!! 

is it any wonder some people  idiots got into trouble and lost their homes ?

we declined and stuck to the budget we knew we could afford,

btw, my mortgage is now almost £200/month cheaper than it was at the beginning due to interest rate drop, 

 

[kerching]

I have said this before.......the light at the end of the tunnel,is a BIG train coming towards us at great speed

 

[Marvo]

I remember when I bought my house in the UK many years ago (mid 80's), I think my mortgage was for £35000.00 on a £40000.00 house. I was earning just over 1.5K each month then but the interest rates were low and the payments were easy to make, proportionally it was about 20% ish of my salary.

 

[Technician]

Had to laugh this morning....Robert Peston, the BBC correspondent

is currently in Davos.  He briefly described the Great, the Good and

the Gits. 

He bumped into Matt Daemon, an American fillum star, whatever that

is.  Matt was at dinner sitting next to a young man and he asked who

he was.

His reply?

"I just happen to be the Prime Minister of Finland."

 

[Steve3948]

Bought first house in 1981, 2 Bed Semi with Garage, £19,000, put £2,000 deposit so £17,000 on an endowment.

Then the rule of thumb was mortgage should be no more than 1 weeks wages, which seemed to work ok.

My daughter has been trying to buy a place, she has £7,000 deposit and she earns around £8 per hour, the most she's been offered to date is 80k, so with her deposit it buys nothing.

 

[Technician]

There was, IIRC, a generally applied rule that the lender would

not lend more than 3 to 4 times the gross income of the applicant.

This may have varied according to the region but it became very

clear to me that this went to the dogs when the "self certifying

mortgage" was introduced in about 2003.  No proof of earnings

was needed, or so it seemed.   Money appeared to be in piles on

the table and on offer.  This, in a time at which we NOW know that

the banks were HOPELESSLY undercapitalised;  not my words,

Mervyn King's.

The lady who spoke to me about my first mortgage could not easily

explain the difference between a "Capital & Interest" type and an

"endowment" type mortgage.  These were, in general, the only ones

on offer.

The fact that she was in an advisory role and could not elucidate

was a total mystery to me.

The reason we now have a Canadian at the head of the Bank of

England is because he warned all of the Canadian banks of the

toxic nature of the bad debt that was being passed off as a

"Mortgage Backed Security" by American banks.

The people who did this knew British banks had the money and

were fool enough to part with it.

What stopped the powers in place at the time in Britain from taking

the same action as was taken in Canada?

Since when, I ask, was a mortgage ever an asset?

 

[batty]

In the old days you had a mortgage because you then paid less tax. All good until one of the governments put a stop to that. Can't remember which one it was as to me they are all the same anyway.