Interest Rates

[Betty Boop]

A cut in Interest rates to 0.25% a disaster for savings and pensions. You'd be better keeping your money under the mattress ! :boo hoo:

[Hibs Class]

A cut in Interest rates to 0.25% a disaster for savings and pensions. You'd be better keeping your money under the mattress ! :boo hoo:

You might be right. I'm treasurer of a charity and have just received a letter from RBS saying that they may charge us for holding a credit balance.

[Hibbyradge]

A cut in Interest rates to 0.25% a disaster for savings and pensions. You'd be better keeping your money under the mattress ! :boo hoo:

:agree:

Or if you happen to be going abroad anytime in the next decade or so.

[GlesgaeHibby]

A cut in Interest rates to 0.25% a disaster for savings and pensions. You'd be better keeping your money under the mattress ! :boo hoo:

The Brexit vote, as expected, has been a total disaster.

[Pete]

The Brexit vote, as expected, has been a total disaster.

For me, this is the only tangible effect of the Brexit vote so far and I have to say it's brilliant. I'll be paying less for my mortgage as will millions of others.

It's odd because we were told that a brexit vote would mean higher interest rates and higher mortgage payments. It just shows you how much waffle was put out there by both sides when the reality was that nobody had a clue what would happen.

[Colr]

A cut in Interest rates to 0.25% a disaster for savings and pensions. You'd be better keeping your money under the mattress ! :boo hoo:

Not for pensions. The stock market just jumped.

Nor for savers if they save in equities.

[CropleyWasGod]

Not for pensions. The stock market just jumped.

Nor for savers if they save in equities.

Or if they keep it in property :agree:

[Moulin Yarns]

Or if they keep it in property :agree:

Where I'm thinking of going CWG. Live in Perthshire, but looking to get a place in the Leith/Trinity area. Use it instead of hotels when we come to the City but maybe let it as a holiday let. Savings and Pension Lump sums will be enough I think.

[RyeSloan]

Not for pensions. The stock market just jumped. Nor for savers if they save in equities.

It is for final salary schemes though and for the value of cash in general.

If anyone thinks interest rates at 0.25% is actually a good thing in the long term then they need their head examined...all it is doing is encouraging more debt and more spending while driving a huge mis allocation of capital into riskier and risker investments for people who want any sort of return on their cash. And that's before you look at the impact of QE has on gilt yields and the concept of central banks holding corporate debt...all obtained with magic money!

Only the latest in a long line of central bank interventions that are doing more harm than good.

[CropleyWasGod]

Where I'm thinking of going CWG. Live in Perthshire, but looking to get a place in the Leith/Trinity area. Use it instead of hotels when we come to the City but maybe let it as a holiday let. Savings and Pension Lump sums will be enough I think.

The old cliche "safe as houses" comes to mind.

That said, there's a bit of a moral dilemma involved. Edinburgh is the place to buy, if you can afford it, to get a decent income. However, that pushes prices up and squeezes out the next generation of potential buyers. With a couple of offspring trying to buy, I see that side of things, and it's not pretty.

[Moulin Yarns]

The old cliche "safe as houses" comes to mind.

That said, there's a bit of a moral dilemma involved. Edinburgh is the place to buy, if you can afford it, to get a decent income. However, that pushes prices up and squeezes out the next generation of potential buyers. With a couple of offspring trying to buy, I see that side of things, and it's not pretty.

Not at the stage of buying yet, so get in quick :wink: Aiming for next year, but looking to get an idea of the type of places we can afford without a mortgage.

[Jim44]

A cut in Interest rates to 0.25% a disaster for savings and pensions. You'd be better keeping your money under the mattress ! :boo hoo:

Those who were/are able to tie up cash in 3 to 5 year fixed rate bonds will get a better return on their cash. Even then, with today's news, even the rates for that type of investment will be peanuts.

[johnbc70]

Cash rates are so low anyway will it make much difference? Skipton Building Society have in the last hour reduced their rates by 0.20% on a number of products. If you lucky enough to have £50,000 in Savings your now a whole £1.93 a week worse off.

[RyeSloan]

Cash rates are so low anyway will it make much difference? Skipton Building Society have in the last hour reduced their rates by 0.20% on a number of products. If you lucky enough to have £50,000 in Savings your now a whole £1.93 a week worse off.

Indeed...but that's part of the problem. Super low interest rates (be that 0.5% or 0.25%) simply penalises savers. So the more prudent you are the more you get hammered by these policies. Politicians bemoan lack of retirement saving and the closing of final salary schemes yet are fully complicit in setting the rules that are crushing he ability for people to get a return on any savings!

As some have alluded to the next step is negative rates where you are actually charged for not having spent all you have. Central banks are simply trying to force people to spend spend spend in a desperate and futile attempt to encourage 'growth'. A number of countries have now banned cash transactions over a certain amount (France being one)...just another step in authorities slowly taking over people's ability to hold cash and therefore forcing them to spend by 'encouraging' them not to hold savings as the value of them can only fall unless you take risk. A risk that gets bigger all the time as more and more people chase yields and thus drive up the price (and yields down) of any yielding asset.

The BoJ have taken this policy to new levels...they are now top 10 holders in a huge amount of Japanese listed companies. If they keep going the way they are eventually the state (through the central bank) will own the lot, all with newly printed cash. It truly is bonkers.

The only solution I can see for the man in the street is to hold gold and gold miners...they have had a great run already but are just about the only hedge against the central bank war on the fundamental principles of sound money.

[Pretty Boy]

The old cliche "safe as houses" comes to mind.

That said, there's a bit of a moral dilemma involved. Edinburgh is the place to buy, if you can afford it, to get a decent income. However, that pushes prices up and squeezes out the next generation of potential buyers. With a couple of offspring trying to buy, I see that side of things, and it's not pretty.

It's not just not pretty, it's nigh on impossible.

Unless you are in a position of being able/willing to live with your parents until an advanced age and have no life, have parents able to provide a substantial loan/gift or have an inheritance from an elserly relative (which is a grim way to think) then getting in the Edinburgh ladder is soul destroying.

I'm at a stage where I really regret going to uni at 18 as it meant moving away from home and spending a small fortune in rent in Aberdeen and Edinburgh. In many cases a degree has become so devalued due to the ridiculous criteria for getting some jobs that my earnings are substantially lower than guys I know who jacked school at 16 and learned a trade or a vocational qualification. I wish I had done the same.

[steakbake]

The Brexit vote, as expected, has been a total disaster.

No no no, you're wrong... we have all these countries lining up to set up trade deals and we've taken back control. The stock market has rebounded because all of those cheap shares after it tumbling and actually, the decimation of the pound is a good thing...for some reason... that no-one can really explain.

We've also sold off one of our biggest and most successful companies to Japanese ownership - think of all the cash that we've now taken back control of...

Brexit is a clusterf*** of a disaster and this is tip of the iceberg stuff.

[Colr]

Or if they keep it in property :agree:

good place to put it imo

[RyeSloan]

No no no, you're wrong... we have all these countries lining up to set up trade deals and we've taken back control. The stock market has rebounded because all of those cheap shares after it tumbling and actually, the decimation of the pound is a good thing...for some reason... that no-one can really explain. We've also sold off one of our biggest and most successful companies to Japanese ownership - think of all the cash that we've now taken back control of... Brexit is a clusterf*** of a disaster and this is tip of the iceberg stuff.

A fall in sterling is a positive step in remedying the rather large balance of payments deficit. It reduces the price of exports while at the same time discouraging the purchase of imports by encouraging domestic consumption. Thus it reduces the need for Britain to continue to rely on foreign money to finance our lifestyles.

I'm not saying it's all good but it is certainly not all bad and anyway look at the long term picture and you will see the devaluation of the pound is not a Brexit thing it's just the continuation of a very very long term trend. The pound used to be worth almost $10!

[Godsahibby]

It's not just not pretty, it's nigh on impossible.

Unless you are in a position of being able/willing to live with your parents until an advanced age and have no life, have parents able to provide a substantial loan/gift or have an inheritance from an elserly relative (which is a grim way to think) then getting in the Edinburgh ladder is soul destroying.

I'm at a stage where I really regret going to uni at 18 as it meant moving away from home and spending a small fortune in rent in Aberdeen and Edinburgh. In many cases a degree has become so devalued due to the ridiculous criteria for getting some jobs that my earnings are substantially lower than guys I know who jacked school at 16 and learned a trade or a vocational qualification. I wish I had done the same.

I can't agree with the nigh on impossible part of this. Having been involved in banking in Edinburgh there are plenty of people who manage to put money away for a deposit and still have a life. Yes the size of your deposit will mean you are at the higher end of the LTV and having to pay more in interest but mortgages are achievable for first time buyers in full time employment. People just have to be realistic with where they are looking to buy.

[easty]

I can't agree with the nigh on impossible part of this. Having been involved in banking in Edinburgh there are plenty of people who manage to put money away for a deposit and still have a life. Yes the size of your deposit will mean you are at the higher end of the LTV and having to pay more in interest but mortgages are achievable for first time buyers in full time employment. People just have to be realistic with where they are looking to buy.

Yep. Me and my missus rented for 6 years, saved over £12k, bought our first house in Edinburgh, lived in it for 5 years, sold it and moved up the property ladder.

It's absolutely doable. Your first home will likely not be your dream home, and it's obviously more fun spending your money than saving it, but that's just the way it is.

[Speedy]

Yep. Me and my missus rented for 6 years, saved over £12k, bought our first house in Edinburgh, lived in it for 5 years, sold it and moved up the property ladder.

It's absolutely doable. Your first home will likely not be your dream home, and it's obviously more fun spending your money than saving it, but that's just the way it is.

I'd agree as well. Very doable.

[Pretty Boy]

I can't agree with the nigh on impossible part of this. Having been involved in banking in Edinburgh there are plenty of people who manage to put money away for a deposit and still have a life. Yes the size of your deposit will mean you are at the higher end of the LTV and having to pay more in interest but mortgages are achievable for first time buyers in full time employment. People just have to be realistic with where they are looking to buy.

It's doable but it's a slog. We've been saving for 4 years now and we're getting there but that's accepting Edinburgh has been replaced by out the city. I'm under absolutely no illusions about what we are looking at, my expectations aren't at all high.

The % increase in private rental prices in the last few years has been difficult as well. Of my mates around my age I would say it's somewhere between a 2 and 3 to 1 ratio of people who don't own a home to those that do. A few have, unwisely imo, just given up.

[johnbc70]

It's doable but it's a slog. We've been saving for 4 years now and we're getting there but that's accepting Edinburgh has been replaced by out the city. I'm under absolutely no illusions about what we are looking at, my expectations aren't at all high.

The % increase in private rental prices in the last few years has been difficult as well. Of my mates around my age I would say it's somewhere between a 2 and 3 to 1 ratio of people who don't own a home to those that do. A few have, unwisely imo, just given up.

I hope your saving in a Help to Buy Isa? And looking to move to a Lifetime Isa when they become available next year if your not buying before April 2018.

Assuming you are a first time buyer of course.

[Pretty Boy]

I hope your saving in a Help to Buy Isa? And looking to move to a Lifetime Isa when they become available next year if your not buying before April 2018.

Assuming you are a first time buyer of course.
Yes and yes.

The issue I have is my disposable income is stretched pretty much to the limit, I simply can't afford to save anymore so it's a waiting game and a bloody frustrating one at that.

Sent from my SM-G925F using Tapatalk

[johnbc70]

Yes and yes.

The issue I have is my disposable income is stretched pretty much to the limit, I simply can't afford to save anymore so it's a waiting game and a bloody frustrating one at that.

Sent from my SM-G925F using Tapatalk

It's hard I know, I guess I was lucky in I bought my first flat for £55K in 2001 when property was still relatively speaking affordable. Got my foot on the ladder as I then sold it for £115K 3 years later.

At least you are making use of the schemes available to you as met many first time buyers who have no idea about Help to Buy Isa etc.

[Godsahibby]

It's doable but it's a slog. We've been saving for 4 years now and we're getting there but that's accepting Edinburgh has been replaced by out the city. I'm under absolutely no illusions about what we are looking at, my expectations aren't at all high.

The % increase in private rental prices in the last few years has been difficult as well. Of my mates around my age I would say it's somewhere between a 2 and 3 to 1 ratio of people who don't own a home to those that do. A few have, unwisely imo, just given up.

The private landlords in the B2L market certainly do not help matters. Whether the proposed changes by the government on stamp duty on B2L homes makes a difference is still to be seen. It may be a positive and stop people purchasing second homes but by doing that has the potential to reduce the amount of rental properties and increase the rental prices even further.

Edinburgh is a disgrace as well for the numbers of new student accommodation being built. The home builders can't compete with these companies in price and as a city we are losing out on new homes, which a % of would need to be affordable housing.

[Hibrandenburg]

I'm in town for the next few days and have to say that in my view house prices feel to be a lot cheaper now than when I was actually considering buying here about 3 years ago.

There's similar properties on the market for the same price as the one I bought on the outskirts of Berlin and that certainly wasn't the case back then. Even the drop in value of the pound doesn't explain the difference. Also it feels like there are many more properties on the market than 3 years ago which would be a better explanation of the drop in price.

[lord bunberry]

I'm in town for the next few days and have to say that in my view house prices feel to be a lot cheaper now than when I was actually considering buying here about 3 years ago.

There's similar properties on the market for the same price as the one I bought on the outskirts of Berlin and that certainly wasn't the case back then. Even the drop in value of the pound doesn't explain the difference. Also it feels like there are many more properties on the market than 3 years ago which would be a better explanation of the drop in price.
http://www.edinburghnews.scotsman.com/news/edinburgh-house-prices-rise-at-twice-the-national-average-1-4019436

[Hibrandenburg]

http://www.edinburghnews.scotsman.com/news/edinburgh-house-prices-rise-at-twice-the-national-average-1-4019436

Interesting. Just doesn't feel that way walking round the shops.

[Holmesdale Hibs]

The Brexit vote, as expected, has been a total disaster.

Was there not chat by Remain about interest rates going up if we left? Either way, I don't see 0.25% change in either direction as disastrous and from a personal point of view I'm quite happy to have a cheaper mortgage.

[Colr]

Was there not chat by Remain about interest rates going up if we left? Either way, I don't see 0.25% change in either direction as disastrous and from a personal point of view I'm quite happy to have a cheaper mortgage.

Totally in favour if it sends investors on a hunt for a return.