Anyone on MINUS % bank rates yet

[Eziemnaik]

What ZIRP is certainly achieving is killing banks...
Hence more and more consolidation

 

[oldworld]

Slightly off topic but I think now interest rates have fallen lower and lower, until you really earn nothing from any savings, the idea of putting money into banks and building societies has become a bad idea.
What do people do with a fair bit saved over a life time?
Many have bought second houses to rent out.
This I'm sure has partly fuelled the house price boom.
Personally I'd rather see fair interest rates and less increases in the price of housing.

My daughter has a £250000 mortgage at very low rates but I was better off paying 10% on a £ 18000 mortgage.
Even when it went up to 12% it was affordable, just.

 

[screenman]

Half agree, even with low interest rates house prices have gone up so much that lots of the young can't get on the housing ladder to begin with. A product of population growth in a realively overpopulated country.
Of course 3 million immigrants didn't worsen this!!

Go back far enough and most people decended from an immigrant.

 

[screenman]

I bought my house in 1988. Initially, I was paying 1/3 of my net income for my endowment policy and mortgage interest. In less than 6 months interest rates shot up and those costs rose to over 2/3 of my net income.

I was desperately worried that the interest rate was not going to stop rising. Fortunately, it did, at about 15%!

No where near that percentage of income but I remember paying a £75,000 mortgage at that rate.

 

[Notafettler]

Go back far enough and most people defended from an immigrant.

So?

 

[Notafettler]

?
Many have bought second houses to rent out.
This I'm sure has partly fuelled the house price boom.
.

No it has no effect on house prices as they are still providing a home for someone. While someone who buys a second home to use themselves is clearly reducing available homes and forcing up house prices.

 

[oldworld]

No it has no effect on house prices as they are still providing a home for someone. While someone who buys a second home to use themselves is clearly reducing available homes and forcing up house prices.

I think that's what I'm saying. It's the price of houses not the scarcity that has been effected by buy to let.

 

[Notafettler]

I think that's what I'm saying. It's the price of houses not the scarcity that has been effected by buy to let.

A lot of people suggest that, but a landlord will not pay a market price. They need to get them below to make a decent profit.
Legal and General are moving into the rental market as away of paying annuities.
Renting at affordable rents (20% below local market rents). With housing association doing all the renting for a fee. They have a house building factory already up and running. I would be surprised if other annuity providers didn't do the same. Rents are more reliable compared to company bonds.

 

[Electric_Andy]

That said, I still don't see 0% interest on savings a bad thing. ok, it's nice to earn money on your savings but that's not really why I save. I save money because it gives me a sense of security if something unespected should happen in the future. I trust my savings far more then I do my NHS or state pension. At least (fingers crossed) I know my savings won't suddenly lose value, and I can access them whenever I want, whilst they are safe (again, fingers crossed) in the bank's hands rather than under my mattress or in stocks/shares that could plummet.

 

[oldworld]

That said, I still don't see 0% interest on savings a bad thing. ok, it's nice to earn money on your savings but that's not really why I save. I save money because it gives me a sense of security if something unespected should happen in the future. I trust my savings far more then I do my NHS or state pension. At least (fingers crossed) I know my savings won't suddenly lose value, and I can access them whenever I want, whilst they are safe (again, fingers crossed) in the bank's hands rather than under my mattress or in stocks/shares that could plummet.

Unfortunately the money saved is losing value all the time. Interest rates don't keep up with inflation unless you take more risk with your money. Having tried shares and got burnt I steer clear.

 

[Archie_tect]

Crazy situation in the housing market for the last 20 years is the number of houses being bought up by people [usually] in the building trade who extend and upgrade as much as possible and then rent or sell on at even higher prices. House prices will remain unaffordable for first time buyers.

For the foreseeable future it will be cheaper to gain floorspace by extending, rather than moving which stagnates the housing market. The baby boomers whose parents bought their homes are now being left property which, as they have savings, they do up and many rent out again limiting the housing for sale which forces up house prices. This all passes the advantage to the main housebuilders who hold back the supply of new houses on their sites to prevent prices from falling.

Until the Government brings back housing grants for councils and housing associations to build social housing there will not be affordable housing in the UK.

 

[Notafettler]

That said, I still don't see 0% interest on savings a bad thing. ok, it's nice to earn money on your savings but that's not really why I save. I save money because it gives me a sense of security if something unespected should happen in the future. I trust my savings far more then I do my NHS or state pension. At least (fingers crossed) I know my savings won't suddenly lose value, and I can access them whenever I want, whilst they are safe (again, fingers crossed) in the bank's hands rather than under my mattress or in stocks/shares that could plummet.

Unfortunately the money saved is losing value all the time. Interest rates don't keep up with inflation unless you take more risk with your money. Having tried shares and got burnt I steer clear.

Inflation is falling rapidly. I have a marcus account which is beating Inflation with ease but they are lowering interest rates constantly. It's instant access account. I can move money from Marcus to my bank account within minutes.
You need to take into account what @Electric_Andy is doing. He is insuring himself against a sudden need for money, which could result in him borrowing at say 5% interest or more. Insurance cost money. In his case if he is Saving at zero % interest his cost are Inflation about 0.2% at the moment. A cheap form of insurance.

 

[wafter]

Slightly off topic but I think now interest rates have fallen lower and lower, until you really earn nothing from any savings, the idea of putting money into banks and building societies has become a bad idea.
What do people do with a fair bit saved over a life time?
Many have bought second houses to rent out.
This I'm sure has partly fuelled the house price boom.
Personally I'd rather see fair interest rates and less increases in the price of housing.

My daughter has a £250000 mortgage at very low rates but I was better off paying 10% on a £ 18000 mortgage.
Even when it went up to 12% it was affordable, just.

Totally agree. It's a two-front war re. IRs and housing; not only do low rates de-incentivise traditional investment (leading to people looking for alternatives such as the IMO criminal financiaisation of housing) but they also mean more can be borrowed for a given monthly repayment; further pushing up prices.. while we also have "help to buy" to thank for pushing the cost of new-builds to stratospheric levels; subsidising house-building political donors with taxpayers money while shafting the very people it's claimed to help

That said, I still don't see 0% interest on savings a bad thing. ok, it's nice to earn money on your savings but that's not really why I save. I save money because it gives me a sense of security if something unespected should happen in the future. I trust my savings far more then I do my NHS or state pension. At least (fingers crossed) I know my savings won't suddenly lose value, and I can access them whenever I want, whilst they are safe (again, fingers crossed) in the bank's hands rather than under my mattress or in stocks/shares that could plummet.

Unfortunately the money saved is losing value all the time. Interest rates don't keep up with inflation unless you take more risk with your money. Having tried shares and got burnt I steer clear.

Again, this. Interest is a defence against inflation (which in itself is a completely fabricated blag to keep people spending) - not a way to actively accrue wealth. Currency devaluation / debasement seems to be inevitable in the decline of every civilisation and ours appears to be no exception.

While never the optimist I firmly believe the current, clearly unsustainable global economic model is hurtling ever-more rapidly towards total collapse (accelerated by Covid and in out case Brexit as well, against a background of long-term decline) and IMO the sensible money is in damage-limitation rather than profit-seeking.

As such I'll be buying gold this week FWIW; makes more sense to me than watching my FIAT paper becoming ever-more worthless (government inflation figures are laughable when you actually compare them to the 10-20% hikes many essential goods have seen in recent times), leaving it increasingly at risk in failure-prone banks or playing the loaded, grossly over-inflated stock market.

 

[Archie_tect]

Things will never change- those that have money will acquire more from those that have very little. Those that have it don't 'need' the surplus- it could be used for the greater good but it would appear hoarding money becomes an obsession.

 

[Drago]

Not only is it unsustainable, everyone knows it is unsustainable, but no one wants to fix it if it means they actually have to be the first to step off of the gravy train. It's akin to environmentalists telling us how we should protect the planet, while themselves being unwilling to give up their foreign homes and private jets.

There is a big upheavel coming, and the longer the financial model continues as it does, the more pain and disruption it will bring when it collapses. A new dark age beckons.