BBC News – Mortgage lenders say ‘prepare for a rate rise’

[Legal Beagles]

The number of UK homes repossessed during the Spring fell, but households have been warned by lenders to prepare for rate rises.A total of 5,400 properties were repossessed in the second quarter of the year, the Council of Mortgage Lenders CML said.This was down 1,000 on the previous three months, and down by 2,200 on […]

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[dogtired]

Re: BBC News – Mortgage lenders say ‘prepare for a rate rise’

What will happen to those of us on "Libor" rates ours went up again recently.

[Mr $quandaŁot]

Re: BBC News – Mortgage lenders say ‘prepare for a rate rise’

The problem is that rates have been all time long for so long now that people are used to them being 'normal' which is not exactly the case.

It all depends on how people are coping, how over-stretched they are. If you are coping fine now, chances are that a small rate rise won't affect your finances too much. However, if you are struggling to pay your mortgage and other bills now, then it's obviously not looking good.

You usually hear 'experts, media etc. saying that the reason for house price rises is 'shortage of property'. While this may contribute to some extend, when you really think about it, money must come from somewhere. To start with, I think talk about housing shortage is rubbish. Moreover, the main contributor to ever-increasing prices is availability of funds. Be it credit or cash buyers, if no-one had funding to support current prices, the market would collapse.

As it stands, there are plenty of people with enough available funds to buy at the current level. There are also surprisingly many cash buyers, some (but not all) foreign.

So is the current market a bubble? UK as a whole I wouldn't say so. London? I'd say it appears to be.

Only time will tell...