Interest rates

GeorgeK · May 6, 2022

If other countries, especially America, raise their base rates and we don't follow the £ gets weaker. This makes all our imports such as oil and gas and therefore fertiliser more expensive and further fuels inflation as our currency devalues.

There's too much borrowed. We're too reliant on imports. Rock and a hard place and there's no way out this time. It's either recession or runaway inflation take your pick.

midlandslad · May 6, 2022

Stw88 said:
Back when interest was in the teens of percent a million got you a big farm. Now it gets you 60 acre and a house! A good 4-500 acre farm could never pay for its self if interest gets up near 10%.

Could you make a 500 acre farm pay at 5% interest?

Still Farming · May 6, 2022

7610 super q said:
All very well, but those who were prudent and saved for a rainy day will be mightily pissssed that their nest egg has being eroded since 2008. And yes, during the early 90's we were paying 17% interest on our mortgage at one stage, so I know how it feels.

We know pensions with £10K in NS&I savings who get £2 a year interest???
Disgusting RIP off .

farmerm · May 6, 2022

GeorgeK said:
If other countries, especially America, raise their base rates and we don't follow the £ gets weaker. This makes all our imports such as oil and gas and therefore fertiliser more expensive and further fuels inflation as our currency devalues.

There's too much borrowed. We're too reliant on imports. Rock and a hard place and there's no way out this time. It's either recession or runaway inflation take your pick.

From a farmers point I prefer a weaker currency, yet it raises costs but it also increases the value of our outputs.... I am financially better off paying 20% more for inputs if my sales figure, a number larger than my inputs figure, also increases by 20%...

jendan · May 6, 2022

Stw88 said:
Back when interest was in the teens of percent a million got you a big farm. Now it gets you 60 acre and a house! A good 4-500 acre farm could never pay for its self if interest gets up near 10%.

Colwell Fell House looks a snip now at £2 and a quarter million. Was just in 2019 as well. 400 odd acres,good farmhouse,and cottages,and some decent buildings. It used to be that the asking price for a farm all in with the house was about £10,000/acre. Going on todays FW,looks like they have upped it to £20,000.

glasshouse · May 6, 2022

jendan said:
Colwell Fell House looks a snip now at £2 and a quarter million. Was just in 2019 as well. 400 odd acres,good farmhouse,and cottages,and some decent buildings. It used to be that the asking price for a farm all in with the house was about £10,000/acre. Going on todays FW,looks like they have upped it to £20,000.

Not a single property in scottish farmer today

Stw88 · May 7, 2022

midlandslad said:
Could you make a 500 acre farm pay at 5% interest?

paying 4.1% fixed for 30 years so not far out. Sometime feels expensive but I’ve nothing to worry about and can service it easily.

kiwi pom · May 7, 2022

ollie989898 said:
I can't see it. Everywhere I look the economy is running flat out and growth is constrained by a shortage of labour more than anything else. Every tradesman in the locality I have spoken to is saying they are stacked out with work and can't take on any more. I would say houses are not changing hands as fast as they were but there is a shortage of properties in many areas and often houses are viewed a million times within days of coming on the market. You look around and boom they are sold in a wink.

I spend my breaktimes watching the world go by and the rate at which money is changing hands is off the scale, McD's, Costa, diesel, spend spend spend and work work work. I'd say the economy is grinding on pretty well.

Disagree with you there, I think all these full order books and long lead times are a bit of an illusion. Yes they're there at the moment but it won't take much and they'll evaporate over night.
We have the same issues here but I'm starting to hear of people cancelling projects and orders simply because there's no completion date or finalised price.
I think 12 months work today, nothing tomorrow is a real possibility.

egbert · May 7, 2022

farmerm said:
ey but the worse part is those who avoided buying everything on the never never will bare more than their fair share of the pain... savings will be loosing 7%/year because of inflation.

ah, but cash will suddenly become king.
Bide your time, then buy half the street/industrial estate/parish for a bag of peanuts and a mars bar

egbert · May 7, 2022

jerseycowsman said:
£1500, it’s several million, still interest only over base rate till December when we have to decide how much to fix it. Probably do half and half. We bought the farm 18 months ago

I'm sorry for the pain possibly coming....but borrowing millions at interest only, when rates are almost zero????
You've got no wriggle room.
It would be the textbook example of high risk wouldn't it?
The only way forward would be continual property price rises.

I wish you luck, and suspect you're going to need it. lots of it.

jerseycowsman · May 7, 2022

egbert said:
I'm sorry for the pain possibly coming....but borrowing millions at interest only, when rates are almost zero????
You've got no wriggle room.
It would be the textbook example of high risk wouldn't it?
The only way forward would be continual property price rises.

I wish you luck, and suspect you're going to need it. lots of it.

We start repaying capital this December 2 years after purchase. We have spent 2 years getting the farm ready and sorted to afford paying the capital as well, which we can,

holwellcourtfarm · May 7, 2022

farmerm said:
It's only those in charge that have been fools. I fear modern ~~life is~~ expectations are such that the average person hasn't had a huge amount of choice about being in the position they are in.

Then change your expectations!

holwellcourtfarm · May 7, 2022

Jon 3085 said:
This was before yesterday,unsecured.View attachment 1034114

REALLY?

What's the risk profile on that? I've never paid more than 3.5% over base. :scratchhead:

holwellcourtfarm · May 7, 2022

Stw88 said:
Back when interest was in the teens of percent a million got you a big farm. Now it gets you 60 acre and a house! A good 4-500 acre farm could never pay for its self if interest gets up near 10%.

A good 4-500 acre farm hasn't been able to self finance purely from farming in the UK for decades. To much external land investment pressure. UK farms are investment assets, not business ones....

farmerm · May 7, 2022

holwellcourtfarm said:
Then change your expectations!

I am not one of the many using credit to fund a lifestyle I can not afford...

egbert · May 7, 2022

jerseycowsman said:
We start repaying capital this December 2 years after purchase. We have spent 2 years getting the farm ready and sorted to afford paying the capital as well, which we can,

again...good luck. I don't have the organisational skill, or the b4lls to think at that scale

holwellcourtfarm · May 7, 2022

farmerm said:
I am not one of the many using credit to fund a lifestyle I can not afford...

But the public have been 'educated' to expectations of:
Annual holidays
A new mobile phone every 2 years
Dining out
Takeaway food multiple times a week
Wearing fashion clothes
Multiple cars per household
Etc, etc

It underpins our economy.

UK politics, like most others, is utterly wedded to endless economic growth.

The wheels are about to fall off that model it seems.

holwellcourtfarm · May 7, 2022

jerseycowsman said:
We start repaying capital this December 2 years after purchase. We have spent 2 years getting the farm ready and sorted to afford paying the capital as well, which we can,

Are you by any chance a Kiwi?

That typifies their approach. Anyone geared below 50% is considered unusual....

But then losing the farm because the bank call it in is not uncommon either.

holwellcourtfarm · May 7, 2022

glasshouse said:
Interest rates are irrelevant because nobody borrows at base rates anyway

Isn't all borrowing specified as x% over base?

So it DOES matter.

DaveGrohl · May 7, 2022

holwellcourtfarm said:
But the public have been 'educated' to expectations of:
Annual holidays
A new mobile phone every 2 years
Dining out
Takeaway food multiple times a week
Wearing fashion clothes
Multiple cars per household
Etc, etc

It underpins our economy.

UK politics, like most others, is utterly wedded to endless economic growth.

The wheels are about to fall off that model it seems.

You could’ve just said you weren’t specifically meaning @farmerm and left it at that

Interest rates

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0 %

Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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