[Finance] Interest Rates - Review

[mikeyjh]

Nicer areas are less affected by house price reductions, as there is always demand for those areas... (quality of the schools etc)

Are they? I mean, I really don't know but the 'always demand' is already reflected in the higher prices - I don't see any suggestion that they are immune to reductions. The market is the market, if prices are reducing in the less 'nice' areas then that has to have a knock on impact as there is less money coming up the chain??

 

[Live by the sea]

That’s true to an extent but historically the best areas to live in because of schools , restaurants, shops etc have the greatest demand so the impact is less .

In Brighton & Hove there isn’t really one area that has all the best non fee paying schools so the demand has been for the nicest environment taking into account amenities like restaurants, coffee shops , bakeries , architecture, wide tree lined roads and walk ability , proximity to train station and other transport links etc

Hence central Hove , BN3 has been the most sought after postcode in the city for the last few years . Throw in the seafront as well and that lifestyle appeals most to Londoners etc . The downside is obviously the hefty increase in prices in that area.

When I first moved here , the Hove Park area was the place to live , however over the last 5 years particularly, property prices in that area have not risen as much as comparable property in central Hove . I’m not referring to flats only houses.

You can’t really accurately compare flats prices because Hove Park area only has a very small percentage of flats .

Part of my role is estimating values going forward for property developers between a year and 18 months in advance .

 

[WATFORD zero]

Are they? I mean, I really don't know but the 'always demand' is already reflected in the higher prices - I don't see any suggestion that they are immune to reductions. The market is the market, if prices are reducing in the less 'nice' areas then that has to have a knock on impact as there is less money coming up the chain??

Well the property price crash that I remember in detail (losing a lot of money on a house and also moving house at the time) was in 1995. Looking it up, it appears there was a 37% crash from it's height 5 years earlier, which is about what I remember.

It effected every area of Brighton and Hove fairly evenly as, at the time, I was looking at moving from one of @Live by the sea 'worse' areas to one of his 'better' areas, and the house I bought had dropped by a very similar percentage to the one I sold. I can't see any reason for any major difference if there was another 'realignment'

 

[mikeyjh]

Well the property price crash that I remember in detail (losing a lot of money on a house and also moving house at the time) was in 1995. Looking it up, it appears there was a 37% crash from it's height 5 years earlier, which is about what I remember.

It effected every area of Brighton and Hove fairly evenly as, at the time, I was looking at moving from one of @Live by the sea 'worse' areas to one of his 'better' areas, and the house I bought had dropped by a very similar percentage to the one I sold. I can't see any reason for any major difference if there was another 'realignment'

Yeah, that's logically what I expected, there's no reason to suggest that 'nicer' areas are immune. I went away and read some articles which entirely supported this position with the caveat that areas where there were low levels of mortgage debt then there was immunity but these included 'nicer' and 'worse' areas.

 

[SK1NT]

Are they? I mean, I really don't know but the 'always demand' is already reflected in the higher prices - I don't see any suggestion that they are immune to reductions. The market is the market, if prices are reducing in the less 'nice' areas then that has to have a knock on impact as there is less money coming up the chain??

IMO better areas just hold their value better. Obviously they are susceptible to going down but not as much as other areas as the demand to buy is always there. Imagine living in a village, or a small town etc there isn't a conveyer belt of houses on the market. So when one house goes on the market there is high demand for it.

Even though house prices have dropped a little and may drop more, i do expect them to rise again beyond the levels they are now purely because that is what has happened from day dot. I am not saying it's right. House prices are just a joke.

 

[Weststander]

IMO better areas just hold their value better. Obviously they are susceptible to going down but not as much as other areas as the demand to buy is always there. Imagine living in a village, or a small town etc there isn't a conveyer belt of houses on the market. So when one house goes on the market there is high demand for it.

Even though house prices have dropped a little and may drop more, i do expect them to rise again beyond the levels they are now purely because that is what has happened from day dot. I am not saying it's right. House prices are just a joke.

It depends.

A proper recession/high interest rates can affect the upper ends of the market really badly.

An example is where we see very ordinary homes in a boom in Brighton/Hove on the market for eg £1.75m, where in the street and locality it has the feel of something £0.5m lower. Some agents fuel this to grab the business, with “one born every minute’, it only takes one naive buyer from London or overseas for the jackpot. In a boom.

That market and those prices pulled out of a hat, die overnight in a serious market correction.

 

[SK1NT]

It depends.

A proper recession/high interest rates can affect the upper ends of the market really badly.

An example is where we see very ordinary homes in a boom in Brighton/Hove on the market for eg £1.75m, where in the street and locality it has the feel of something £0.5m lower. Some agents fuel this to grab the business, with “one born every minute’, it only takes one naive buyer from London or overseas for the jackpot. In a boom.

That market and those prices pulled out of a hat, die overnight in a serious market correction.

Agree. I was mainly referring to normal family homes just in nicer areas with good schools etc. Not so much the high end market.

 

[sparkie]

How high are rates going to have to go to lance the boil?

Record pay rises fuel fresh inflation fears

Wages continue to rise strongly, raising the prospect of more interest rate rises by the Bank of England.

www.bbc.co.uk

My pay rose by 0% over the last 2 years - so that article isn't my reality and might as well be about Mars.

 

[Si Gull]

My pay rose by 0% over the last 2 years - so that article isn't my reality and might as well be about Mars.

Likewise. I'm self employed and I refuse to rip clients off = no price rises since before Covid. I also work a zero hours job.....no huge wage increase there, I can assure you. Who are these folk whose wages are growing at record rates? Articles such as this are written by people with no understanding of how many don't fit their employment models.

 

[sydney]

Likewise. I'm self employed and I refuse to rip clients off = no price rises since before Covid. I also work a zero hours job.....no huge wage increase there, I can assure you. Who are these folk whose wages are growing at record rates? Articles such as this are written by people with no understanding of how many don't fit their employment models.

as always its the few at the top who are getting the big pay rises.

 

[Herr Tubthumper]

Articles such as this are written by people with no understanding of how many don't fit their employment models.

It’s an average. I remember there was a discussion on here a year or so ago and it seemed there were quite a few who had indeed had a wage increase.

 

[Uncle Spielberg]

The 0.5% increase last month has been fixed rates rise by around 2% since then with 2 year fixed rates now near to 7%, people this year and next will be coming off 1-2% rates

 

[beorhthelm]

as always its the few at the top who are getting the big pay rises.

they might do, you need general wages going up to move the average wage growth up.

 

[Si Gull]

It’s an average. I remember there was a discussion on here a year or so ago and it seemed there were quite a few who had indeed had a wage increase.

The average suits the narrative but is really pretty meaningless on its own without a distribution graphic. The average could be 7.3% with half of the people seeing an increase of around 14% and the rest around 1%, for example.

 

[Herr Tubthumper]

The average suits the narrative but is really pretty meaningless on its own without a distribution graphic. The average could be 7.3% with half of the people seeing an increase of around 14% and the rest around 1%, for example.

If you click on the embedded link in the first sentence of the article it takes you to the ONS page with a lot more