Is everyone going to be affected by the cost of living?

[Southerngal5]

Ie all sectors of society not just the ones who are barely getting by currently & will now pushed into poverty...
The squeezed middle will be affected & will likely have to do without luxuries they once took for granted... I'm finding it quite scary to be honest.. I know I shouldn't as we're quite comfortable & can afford our mortgage & bills but we won't have many of the "nice" things we had planned for the dc... Please don't flame me as I know there are millions worse off but I can't see prices coming down in the foreseeable future...

@EvilPea

1/3 rent 1/3 own outright 1/3 are mortgaged.

So interest rate rises perhaps affect fewer than expected in a mortgage sense.

That’s not me belittling what would be catastrophic for some.

Interest rate hikes will affect renters as well mortgage holders. Unless the landlord owns the property outright, they will have to pass the higher charges on to tenants.

It seems incomprehensible that we can be in dire straits with interest rates still bobbing about close to zero. The rises would affect two groups but could be part of the correction which reduces BTL landlords and frees up property for first time buyers in the long term.

I'm not sure that raising interest rates is the solution that it once might have been. Inflation is global, I don't see how raising interest rates in the UK is going to to lower inflation on imported essentials like food and energy.

I don’t know how many houses of those 1/3 mortgaged are rented out. If the rates go above what it can be put on the market rent for, the home may end up going on the market for sale.

It will be interesting to see how it changes the rental market. Especially when rent has already increased hugely during the pandemic due to a lack of supply. 75% of our income is already going on rent, there comes a point where people just can’t do it.

Christmas 2022 will be quite different I think. I'm saving already.

@Soffit

It seems incomprehensible that we can be in dire straits with interest rates still bobbing about close to zero. The rises would affect two groups but could be part of the correction which reduces BTL landlords and frees up property for first time buyers in the long term.

The correction needed to happen in 2008. The mortgage companies pulled the ladders up on first time mortgages, so the government bailed them out to keep the house market moving and stop prices dropping. They should never have bailed them out. They needed to let it play out.

If the interest rates go high the banks won’t lend easily which in turn stalls the market, and the government will have to swallow it and let it play out or bail it out (again)

I think mumsnet sometimes paints anyone with a mortgage as being rich, and anyone whos a landlord as someone sat on their banknotes and laughing all of the way to the bank whilst counting the keys to their numerous properties; neither of which are necessarily true. Sadly if rent rises are passed onto renters as would be reasonably in reality, if the landlord sells it doesn't mean those renting would be able to get a mortgage which is tougher than ever at the moment. The whole system needs an overhaul in this country.

Savers need a boost too, interest rates always variable, and those with mortgages should have been told this.
There seems so little joy at the moment, the government should address food banks, shouldn’t be needed, while failing to address the root cause.
Glad they are there, we never needed them before.
Maybe some are just enjoying things before the cuts hit

@Canaloha

I think mumsnet sometimes paints anyone with a mortgage as being rich, and anyone whos a landlord as someone sat on their banknotes and laughing all of the way to the bank whilst counting the keys to their numerous properties; neither of which are necessarily true. Sadly if rent rises are passed onto renters as would be reasonably in reality, if the landlord sells it doesn't mean those renting would be able to get a mortgage which is tougher than ever at the moment. The whole system needs an overhaul in this country.

They can only pass the cost on to renters if renters are able to pay it. They could price themselves out the market.

@MidnightMeltdown

I thought it may help prices drop a bit as buyers won't be able to borrow so much money so could they become more affordable?

@Invasionofthegutsnatchers

Christmas 2022 will be quite different I think. I'm saving already.

Yes it will be for a lot of people, which might not be such a bad thing. The mindless consumerism that some people indulge in, just because..., and then they are paying for it in the ensuing months.

[quote woodhill]@MidnightMeltdown

I thought it may help prices drop a bit as buyers won't be able to borrow so much money so could they become more affordable?

[/quote]

But if prices drop due to higher interest rates, then the extra money that first time buyers 'save' on the house, they will instead be paying to the bank in terms of higher interest.

In other words, the amount that people are paying out on a monthly basis won't change, it's just that the proportion paid in interest will be higher.

It's only people who don't need a mortgage who will benefit. These are usually investors.

Yes I see what you mean but I grew up with higher interest rates and houses were definitely more affordable but different times😀

@woodhill

You were lucky! Houses were more affordable then because the population was lower and there was less strain on housing stock.

The problem we have now is that there is huge backlog of people waiting to get on the ladder and not enough houses.

Lower house prices will not mean that more people can afford a house, because the number of houses remains fixed.

So many people seem to think that lower house prices will mean that their kids can get on the ladder, but that's just not logical. The people getting on the ladder will be the same, regardless of price, unless the number of houses dramatically increases.

@woodhill

Yes I see what you mean but I grew up with higher interest rates and houses were definitely more affordable but different times😀

Housing in this country still largely is affordable if you really want it, to get the properties we have had involved a lot of hardwork for the deposit and then the renovation. We are only 31. The amount of FTB I no that expect the four bedroom new build detached is shocking.

I think WFH will have a bigger effect on house prices to be honest as people won't need to be commenter belts which pushes up prices

@EvilPea

75% of income on rent is shocking 😕

This is why the government can't raise interest rates by much unless they are accompanied by significant wage rises.

Landlords with buy to let mortgages would have to raise rents or sell, which would leave councils with a lot of families to house.

I am not likely to struggle at all - provided my job is safe (I’m not sure to be honest!)

However I would also use scary. Even though it may not be the position I’m in, I do feel worried and scared for others… we volunteer in the Foodbank and last week they expected it to be quiet. We live in a wealthy town so we usually get 1 person a week and the rest is just donations. We keep getting 8-9 people - usually representing families. That alone, in a small wealthy town, is a massive increase.

I am scared - I feel like bad things are coming.

Yes I think they will.

We are part of the "squeezed middle" and our energy bills have already doubled. We have high housing costs but we're luckier than lots as there's slack in our budget to absorb some of the costs and a few lifestyle changes (fewer take aways, holidays and meals out) should take care of the rest. I am worried though, I'm public sector and my wage is going down in real terms though.

@Woahthehorsey I completely agree with you it’s the middle that are always relentless squeezed

£50k we start losing our child benefits
£100k we lose our free child care, tax free child care, enter the 60% marginal rate

We are the easy ones to squeeze as for those on minimum wage we are in an unobtainable position of “wealth”. But by the time I’ve paid my PAYE taxes, then another whack in pensions, then lost my child benefits. Someone who is self employed not putting all their income through the books declaring HALF my PAYE income is likely to be sufficiently better off. It is these people who you’ll see out in restaurants and shops etc.

This government sucks. But Corbyn’s labour would have been even worse. They saw anyone earning over £80k as “rich” and fair game for further tax punishments.

This country has gone to the dogs.

It's only going to get worse... Ukraine will be another excuse for increased inflation...

I've actually crossed over to finally being comfortable financially.

I've lived like a hermit for years. I don't have haircuts, get my nails done. Dont buy clothes unless its needed, same with shoes. I never go to coffee shops or cafes, maybe as a one off treat every few months. I make my own lunches, dont buy sandwiches for lunch, make it myself.

I do splash out for the kids.

Have been saving like mad for a house deposit for years which has finally paid off.

I finally became comfortable and thought this is the year my kids have some nice days out and maybe even a holiday abroad. Maybe grab a subway for lunch? Or a Costa?

I'll have to see how these rising bills affect us
Luckily I know we dont have to worry about food or heating, but it is the luxuries which we will have to clamp down on, just when I thought we could start treating ourselves and the kids.

[quote MidnightMeltdown]@EvilPea

75% of income on rent is shocking 😕

This is why the government can't raise interest rates by much unless they are accompanied by significant wage rises.

Landlords with buy to let mortgages would have to raise rents or sell, which would leave councils with a lot of families to house. [/quote]
It’s exactly why they fucked it by not letting it go in 2008. I know it would have been horrific for some, it’s now this glass floor which they can never let break.

I know it’s all hindsight but the great council house sell off (and non replacement). The privatisation of energy firms, bolstering the housing market and bailing out banks in 2008.

All have led to the utter shit storm of now.

@CrimbleCrumble1

So gas and electricity have gone up and are going up more, food is getting more expensive, what else is increasing in price?

Petrol. Second hand cars. Houses.

My husband has been using my car instead of his own to save his petrol. I only filled it up 4 days ago to a 3/4 tank costing £40. And need to fill it up again.

Everything will go up because of the fuel costs.
Getting your hair cut
Car serviced
Costa/ Starbucks

Did my weekly shop yesterday & noticed how much things have increased on precious week 10p here, 20p here it really all adds up & it's going to get worse...