Bloody Hell! How old am I?

[DrFfybes]

I'm sure someone will beat me BUT
my first mortgage was fixed for 2 years at 11% when the SVR was 13.75%

A few years before that I had a bank paying me 15% on my savings (which became my house deposit)

I think this thread is heading into Four Yorkshiremen territory

--kiloran

Well I remember when the 4 Yorkshireman sketch was cutting edge humour, when Ronnie Corbett's monologues were considered quickfire one liners.....

[Dod101]

And on investment matters, it is remarkable how little effect all the gloom and doom from the B of E has had on the stockmarket, little or nothing so far anyway.

Dod

[UncleEbenezer]

And on investment matters, it is remarkable how little effect all the gloom and doom from the B of E has had on the stockmarket, little or nothing so far anyway.

Dod

Why should it? Aren't we all ahead of the BoE here?

The peak of inflation expected by the BoE is on an upward trend. Does anyone expect 13% to be the top?

[pje16]

Why should it? Aren't we all ahead of the BoE here?
The peak of inflation expected by the BoE is on an upward trend. Does anyone expect 13% to be the top?

Not if all the miltant unions demand more than that

[simsqu]

[

It cost £20k but it was 4 storeys and in Notting Hill and in those days mortgage interest was tax deductible.
A great strain at the time but it really worked out very well in the end

You were done. My first house was a six story Georgian mansion in Belgrave Square and the bank paid ME to buy it

[UncleEbenezer]

With a bit of luck, rising rates will finally help make houses more affordable for the next generation, despite government's best efforts to pump them ever upwards. Back to something closer to your experience.

It would be luck. Interest rates are going up because inflation is going up, which means that wages and prices are going up, all of which puts upward pressure on home valuations.

House prices are driven by supply and demand. But that's supply and demand of money, not houses. Socialised, in that government supplies a very high proportion of the money.

Back in the 1980s when we had the mortgage rates that others are talking about (and mine was 16% for a while as well) home prices still went up nicely. As a real asset property is a decent inflation hedge.

Yes, I remember rapid rises in the 1980s: it's what told me that I wasn't just a couple of (new-graduate) payrises from being able to buy something. But interest rates were falling, so were below the expectations we'd grown up with. And - crucially - mortgage lending was being eased, which was a huge driver for price rises. And of course with there being no rentals market (unless you had a grapevine), buying was much more urgent than today, so all that mortgage easing drove prices skywards.

Also one third of houses in the UK are bought for all-cash so mortgage rates won't affect those at all.

Prices are set on the margins. Cash buyers are not the margins.

[pje16]

He has my sympathy
https://www.bbc.co.uk/news/business-62432568

he must feel like he's talking to children to explain the basics of economics

[Dod101]

And on investment matters, it is remarkable how little effect all the gloom and doom from the B of E has had on the stockmarket, little or nothing so far anyway.

Dod

Why should it? Aren't we all ahead of the BoE here?

The peak of inflation expected by the BoE is on an upward trend. Does anyone expect 13% to be the top?

I am not sure if you are serious. If the B of E is right (and that is a big if, given their record) we will be back to the late 1990s when I returned to live in this country. The markets did nothing for several years if I remember correctly. A falling GDP is hardly a recipe for an increasing valuation of the stockmarket. Real assets might increase in value but commercial property is usually valued on its yield. I cannot see that rising for a while.

Dod

[MrFoolish]

And on investment matters, it is remarkable how little effect all the gloom and doom from the B of E has had on the stockmarket, little or nothing so far anyway.

Dod

What's the alternative to the stockmarket - go into cash and earn a guaranteed minus 13% per annum? If this inflation persists for a few years your assets will be severely devalued.

[Dod101]

And on investment matters, it is remarkable how little effect all the gloom and doom from the B of E has had on the stockmarket, little or nothing so far anyway.

Dod

What's the alternative to the stockmarket - go into cash and earn a guaranteed minus 13% per annum? If this inflation persists for a few years your assets will be severely devalued.

Not much I guess, but I am puzzled about why the LSE seems not to be a bloodbath. Maybe of course because it has never been over valued anyway, unlike some markets.

Dod

[NotSure]

And on investment matters, it is remarkable how little effect all the gloom and doom from the B of E has had on the stockmarket, little or nothing so far anyway.

Dod

What's the alternative to the stockmarket - go into cash and earn a guaranteed minus 13% per annum? If this inflation persists for a few years your assets will be severely devalued.

Not much I guess, but I am puzzled about why the LSE seems not to be a bloodbath. Maybe of course because it has never been over valued anyway, unlike some markets.

Dod

Already priced in, I guess. Had rates gone up 0.75% it would have likely tanked, 0.25% it would have risen?

[bungeejumper]

Ah happy days. I had just bought my first bachelor pad in 1979, having come to the bitter end of my first marriage, and I'd moved into my new pad with no money and very little furniture. And the first week I was there, the mortgage rate went up to 17% overnight.

I cried bitter tears of desperation, as anyone would have. But fortunately the gubmint sent out an order to all the lenders that they should cushion people like me by deferring the increase, so that owners could carry on paying the old monthly instalments, and that the shortfall would be added to the outstanding mortgage sum. That wouldn't have been a great solution in the long term, but fortunately the skyrocketing mortgage rates didn't last long, so honour was quickly satisfied and sanity soon returned.

But maybe we ought to ask the snowflake millennials what they'd have done, apart from crying a lot louder than me?

BJ

[quelquod]

Ah happy days. I had just bought my first bachelor pad in 1979, having come to the bitter end of my first marriage, and I'd moved into my new pad with no money and very little furniture. And the first week I was there, the mortgage rate went up to 17% overnight.
BJ

I remember it well not that 15% was what you’d call cheap anyway! We had just decided on a stretch move upmarket when the rate soared. All the more galling as our new mortgage just exceeded the threshold for an extra 0.5% on top. Couldn’t understand why the best customers were charged the highest rates.

[UncleEbenezer]

And on investment matters, it is remarkable how little effect all the gloom and doom from the B of E has had on the stockmarket, little or nothing so far anyway.

Dod

Why should it? Aren't we all ahead of the BoE here?

The peak of inflation expected by the BoE is on an upward trend. Does anyone expect 13% to be the top?

It seems Citibank are giving us the next forecast in the sequence.
e.g. https://www.reuters.com/world/uk/uk-inf ... 022-08-22/

[Lootman]

And on investment matters, it is remarkable how little effect all the gloom and doom from the B of E has had on the stockmarket, little or nothing so far anyway.

Why should it? Aren't we all ahead of the BoE here?

The peak of inflation expected by the BoE is on an upward trend. Does anyone expect 13% to be the top?

It seems Citibank are giving us the next forecast in the sequence.
e.g. https://www.reuters.com/world/uk/uk-inf ... 022-08-22/

That seems unduly speculative but, if you buy it, then there are some ways to navigate and profit from it.

Shorting bonds and going long volatility are obvious ones.

Longer term, equities and property benefit from inflation, but could see short-term losses.

Maybe time for gold to finally become golden? Whilst cash becomes trash.

There are always ways to make money no matter what the situation. Personally I relish volatility and chaos as money-making opportunities.