Bairnardo Posted June 21, 2023 Share Posted June 21, 2023 28 minutes ago, RH33 said: My heart bleeds for the landlord, it really does. I'm guilty of watching property shows like location and what I always find strange on the insistence kids need own rooms. Now ideally I'd love more space but it wasn't option. If my son comes back it'll be a sofabed in living room for me part of the week. I bought in August just before shit hit fan so I've four years to worry but I'm pay a bit more than minimum. If you're at 59, interest only with no evidence capital plan and on benefits then you've no hope of a mortgage. Even in work she'd only have 9/10 yr options. The examples the BBC used were terrible. How do the BBC find the people to run these articles on? What's the process? Like see when Olivia and Logans first trip to Val D'Isere is having to be cancelled because no one is hiring the Air BnB in Skye thru the peak season, how do the BBC find out about that and decide to run a story? How do they have such and incredible record of finding such relentlessly posh, unrelatable characters? 0 Quote Link to comment Share on other sites More sharing options...
Have some faith in Magic Posted June 21, 2023 Share Posted June 21, 2023 I didn't know it could go up so much? Well if you read the documents that come as part of the application it tells you if mortgage rates go up to x% you will be paying y extra a month. Did people really think interest rates that were at a historic low were going to stay that way forever? Anyone that streched themselves on 1.x% mortgage needs their heads looked at. 1 Quote Link to comment Share on other sites More sharing options...
Gnash Posted June 21, 2023 Share Posted June 21, 2023 For context, those rolling off fixes now will generally have had their affordability assessed at the SVR at the time, plus a minimum of 3%. So, in theory at least, they should be able to afford a new rate of 6% as an absolute minimum. 0 Quote Link to comment Share on other sites More sharing options...
O_Kahn Posted June 21, 2023 Share Posted June 21, 2023 9 minutes ago, Have some faith in Magic said: I didn't know it could go up so much? Well if you read the documents that come as part of the application it tells you if mortgage rates go up to x% you will be paying y extra a month. Did people really think interest rates that were at a historic low were going to stay that way forever? Anyone that streched themselves on 1.x% mortgage needs their heads looked at. I suppose the last 15 years of low rates has just become the norm for some people. It does sound like some of the examples in the BBC story are people on interest only deals who haven't considered it properly. Can't see the Tories putting in much help - their core voter will remember when interest rates went above 12% in the 1980s and think that people should simply tighten their belt. 0 Quote Link to comment Share on other sites More sharing options...
SanStarko Posted June 21, 2023 Share Posted June 21, 2023 17 minutes ago, Have some faith in Magic said: I didn't know it could go up so much? Well if you read the documents that come as part of the application it tells you if mortgage rates go up to x% you will be paying y extra a month. Did people really think interest rates that were at a historic low were going to stay that way forever? Anyone that streched themselves on 1.x% mortgage needs their heads looked at. Used to be a mortgage advisor and it was a minority of people who genuinely listened when you took them through what could happen with mortgage rates. Majority of people didn't care, even when you'd try and explain to them how important this is and why they needed to pay attention. It was like the idea that rates could go up was a complete non-starter in their head and nothing to worry about, and nothing you'd say would change that opinion. I mean why pay any attention, it's only probably the biggest financial decision you're going to make, so not that important. 0 Quote Link to comment Share on other sites More sharing options...
Shadow Play Posted June 21, 2023 Share Posted June 21, 2023 9 minutes ago, O_Kahn said: I suppose the last 15 years of low rates has just become the norm for some people. It does sound like some of the examples in the BBC story are people on interest only deals who haven't considered it properly. Can't see the Tories putting in much help - their core voter will remember when interest rates went above 12% in the 1980s and think that people should simply tighten their belt. I don’t think any political party in power will help much. A major point of raising interest rates is to remove money from the economy, thereby reducing spending power and with it, in theory, inflation. 3 Quote Link to comment Share on other sites More sharing options...
RH33 Posted June 21, 2023 Share Posted June 21, 2023 12 minutes ago, Gnash said: For context, those rolling off fixes now will generally have had their affordability assessed at the SVR at the time, plus a minimum of 3%. So, in theory at least, they should be able to afford a new rate of 6% as an absolute minimum. I can't be arsed looking out the paperwork. Think mine was stress tested to 7%. 0 Quote Link to comment Share on other sites More sharing options...
Shadow Play Posted June 21, 2023 Share Posted June 21, 2023 1 minute ago, SanStarko said: Used to be a mortgage advisor and it was a minority of people who genuinely listened when you took them through what could happen with mortgage rates. Majority of people didn't care, even when you'd try and explain to them how important this is and why they needed to pay attention. It was like the idea that rates could go up was a complete non-starter in their head and nothing to worry about, and nothing you'd say would change that opinion. I mean why pay any attention, it's only probably the biggest financial decision you're going to make, so not that important. Interesting you say that. I know a few people that have mortgaged themselves to the max. Their argument being buy a £500,000 now and if house prices double by the time they retire they make £500,000. They then sell the big house their in, buy a smaller one at the now price of £400,00 (previously £200,000) and pocket the £600,00. If they buy a £200,000 house now and again if house prices double by the time they retire they only make £200,000 and they have to remain in the house to have somewhere to live because they are already living in a relatively small house. All a bit of a gamble and I would not be surprised is some face some difficult choices if rates remain higher for some time. 0 Quote Link to comment Share on other sites More sharing options...
101 Posted June 21, 2023 Share Posted June 21, 2023 20 minutes ago, O_Kahn said: Can't see the Tories putting in much help - their core voter will remember when interest rates went above 12% in the 1980s and think that people should simply tighten their belt Don't worry they have... Despite 36% of readers of the Torygraph saying this is worse than ever. https://www.telegraph.co.uk/property/news/people-complaining-interest-rates-mortgage-1970/ 0 Quote Link to comment Share on other sites More sharing options...
O_Kahn Posted June 21, 2023 Share Posted June 21, 2023 21 minutes ago, Shadow Play said: I don’t think any political party in power will help much. A major point of raising interest rates is to remove money from the economy, thereby reducing spending power and with it, in theory, inflation. I agree, I doubt Starmer or Reeves would do much different. With energy price subsidies and furlough it felt inevitable that the government would u-turn, despite initial noises that it wouldn't be possible. Not with mortgages. I don't really know if BoE has f***ed this up with interest rates or not. There are so many contradictory indicators in the economy just now, and with many of them it's hard to find a precedent. 0 Quote Link to comment Share on other sites More sharing options...
stimpy Posted June 21, 2023 Share Posted June 21, 2023 This mess has been a long time coming. Successive governments neglecting to build the social housing that was sold off driving up private rent and house prices. People were looking at spending 30% of their income on rent or taking advantage of 100% mortgages or help to buy and firing that 30% into buying somewhere. At the time they could factor in some wiggle room but the increasing price of everything from food to fuel has stolen that away and a couple of percent interest point raise might as well be 20%. I've got 3 years left on my fixed rate so I hope that's enough for some stability to be found. A guy at my work has a 35 year mortgage which I find crazy but how else can you buy a house when prices don't seem to ever stop. Mine has estimated to have gone up £20k in the two years since I bought it. That can't be sustainable. 0 Quote Link to comment Share on other sites More sharing options...
TxRover Posted June 21, 2023 Share Posted June 21, 2023 1 hour ago, Shadow Play said: Interesting you say that. I know a few people that have mortgaged themselves to the max. Their argument being buy a £500,000 now and if house prices double by the time they retire they make £500,000. They then sell the big house their in, buy a smaller one at the now price of £400,00 (previously £200,000) and pocket the £600,00. If they buy a £200,000 house now and again if house prices double by the time they retire they only make £200,000 and they have to remain in the house to have somewhere to live because they are already living in a relatively small house. All a bit of a gamble and I would not be surprised is some face some difficult choices if rates remain higher for some time. It’s the same people that gobbled up schemes like…borrow money at 2-3% and purchase stocks and options, make money hand over fist for free. Before that, while rates were higher, it was buy on margin to use leverage to get more stocks for the money and multiply your return. None of those schemes allow for a down market, much as that housing ladder claptrap assumed low rates and increasing values, without explaining who could possibly afford that house that/doubled in value. It’s all based upon people having little to no financial literacy. 0 Quote Link to comment Share on other sites More sharing options...
parsforlife Posted June 21, 2023 Share Posted June 21, 2023 11 hours ago, Hedgecutter said: This sob story below is where I completely lose sympathy with folk. What did she expect to happen when taking a monster mortgage of £1,300pm at a time of record interest lows? All she needs is a house for a family of four in East Anglia (i.e. not exactly London). Another case of folk jumping rungs on the so-called 'housing ladder' (i.e. never having anything more than a mortgage that would still be affordable during higher rates, and then upscaling once the balance is significantly down). Can't support that Lib Dem policy to give cash handouts to folk like this, who have lost their mammoth gamble. It's an increase to historically average rates, not a period of supermegahyperinflation. https://www.bbc.co.uk/news/uk-england-norfolk-65761233 What an incredible article, let’s feel sorry for 1. Those that have had an interest free mortgage for 25 years but haven’t made the slightest plan to reduce the capital amount, just hoping the magic money tree will cover it. 2. the leaching landlords who are raging that they might need to cash in on their heavy investment and pay for their own holidays and nights out without being able to have another family fork the bill. 3. The poor guy who has been forced into sensible financial decisions and spend his meagre 50 grand savings to reduce his mortgage payments, how is he meant to diversify his financial portfolio when he needs to do things like pay for his housing? Sure the millions facing heat or eat will be very empathetic with a man forced into a similar horrific choice. 4 Quote Link to comment Share on other sites More sharing options...
itzdrk Posted June 21, 2023 Share Posted June 21, 2023 12 hours ago, Bairnardo said: I think you're right here. I fully agreed with the govt stepping in on utility bills. The cost of which remains a disgrace. But with mortgages, there were choices when the mortgage were taken out and there are choices now for all involved. Now, they are tough, massive choices, but they are there. Lives were at stake in a winter energy crisis. Only pride really stands to get hurt when downsizing 4 bedrooms to the 2 you really need. How do you downsize from a one bedroom flat? 0 Quote Link to comment Share on other sites More sharing options...
Buttocks Brown Posted June 22, 2023 Share Posted June 22, 2023 (edited) 8 hours ago, stimpy said: A guy at my work has a 35 year mortgage which I find crazy but how else can you buy a house when prices don't seem to ever stop. I think there will be a lot of people having to resort to these. I suppose that us in our 30s/40s won't be getting early retirement deals like some of our parents anyway. Can't pick up our pensions until we're 68 but may also be working until that age to pay off the mortgage. For those coming from relatively well off backgrounds, it'll be a big generational shift. Edited June 22, 2023 by Buttocks Brown 0 Quote Link to comment Share on other sites More sharing options...
RH33 Posted June 22, 2023 Share Posted June 22, 2023 25 minutes ago, Buttocks Brown said: I think there will be a lot of people having to resort to these. I suppose that us in our 30s/40s won't be getting early retirement deals like some of our parents anyway. Can't pick up our pensions until we're 68 but may also be working until that age to pay off the mortgage. For those coming from relatively well off backgrounds, it'll be a big generational shift. Mine is 29 years and I took it out at 40. As I said to someone the other day, I didn't want to buy, if I could've gotten a social housing rent I'd have happily done that for rest my days. Unfortunately when my landlord decided to sell rentals were 800/900/1000 p/m. Even if I'd moved back to Paisley I was looking at the same. The housing associations don't place you until some stupid number days before eviction. Likely homeless accomodation and I'd have risked my ex using that to take custody. With it possibly taking "years" to get a place. The council were so unhelpful. A lady at Bridgewater housing pointed me in direction of all the local housing associations. Was genuinely a really stressful and worrying time. I was in the position that bank mum and dad were able to help with a deposit and my mortgage is £419, although I'm overpaying a wee bit. I'd tried but failed on first attempt but tried again three months later and was offered a mortgage. I'm glad I have the security to get the kids through high school here. 3 Quote Link to comment Share on other sites More sharing options...
resk Posted June 22, 2023 Share Posted June 22, 2023 11 hours ago, Bairnardo said: How do the BBC find the people to run these articles on? What's the process? Like see when Olivia and Logans first trip to Val D'Isere is having to be cancelled because no one is hiring the Air BnB in Skye thru the peak season, how do the BBC find out about that and decide to run a story? How do they have such and incredible record of finding such relentlessly posh, unrelatable characters? Trawling the social medias is how tabloids get most of their stories now - I'm guessing the BBC is the same. So they are naturally going to end up with a lot of stories about attention-seeking welts. 0 Quote Link to comment Share on other sites More sharing options...
Bairnardo Posted June 22, 2023 Share Posted June 22, 2023 7 hours ago, itzdrk said: How do you downsize from a one bedroom flat? It's a fair point. I guess "downsizing" isn't neccesarily only about size though. Anyway, how you help out in this scenario has been totally muddied by the shambolic housing crisis we have curated in this country which means probably nobody knows what the answer is. I can't be the only one that finds the idea of the govt pouring money into supporting peoples private home ownership a bit jarring though. Labour in the papers today saying the banks should be forced to allow people to switch to interest only until shit calms down. Perhaps a more realistic scenario that. I'm sure the Tories will find a way to use this to transfer money to themselves and their mates tho 0 Quote Link to comment Share on other sites More sharing options...
vikingTON Posted June 22, 2023 Share Posted June 22, 2023 10 hours ago, O_Kahn said: I agree, I doubt Starmer or Reeves would do much different. With energy price subsidies and furlough it felt inevitable that the government would u-turn, despite initial noises that it wouldn't be possible. Not with mortgages. I don't really know if BoE has f***ed this up with interest rates or not. There are so many contradictory indicators in the economy just now, and with many of them it's hard to find a precedent. The interest rate rises will have no significant impact because the causes of inflation are chiefly on the supply side: Brexit. Price-gouging by large conglomerates. The war in Ukraine that we can find limitless money in aid for, while stating that nothing can possibly be done at home. It is not the 1970s and inflation is not being caused by pesky workers getting exorbitant wage rises, never mind mortgage payers having too much disposable income. There are also far fewer mortgage-paying households in the UK because the boomer generation are pretty much owner-occupiers, so interest rate rises provide that large section of households with more disposable income not less through interest accrued on savings. UK's businesses are also highly dependent on cheap credit and many of the larger chains are up to their eyeballs in leveraged debt. Interest rate rises will trash the economy and cause an enormous recession before they actually curb prices. The BoE should either have its terms of operation reformed to remove its hopelessly out of date and narrow inflation target, or it should lose its independence. 8 hours ago, itzdrk said: How do you downsize from a one bedroom flat? A: Try Robert Street in the Port. 3 Quote Link to comment Share on other sites More sharing options...
welshbairn Posted June 22, 2023 Share Posted June 22, 2023 That's base rates up to 5%, variable mortgage rates are usually around 2% more. 0 Quote Link to comment Share on other sites More sharing options...
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