To think a recession is looming?

[GrannyBloomers]

I was quoted £2 a litre for heating oil. £1000 for 500 litres, a matter of weeks ago it was roughly a quarter of the price.

Energy bills set to be £3k per annum - potentially more when a new price cap comes in in October.

Diesel near me is 171p and rising.

I'm in a 3 bed semi, nothing special. I need at least 1500 litres of oil a year (it runs the hot water too). That's say £3k. No gas but electric. I'm doing ok with cutting use = £1.5k per annum.

That's 4.5k at todays prices for household power. What will it be in October - 6k, 9k more?

This is before other costs increase - food will go up when the cost of storing it (refridgeration etc uses energy) and transport also increase.

If all the average person's income is spent on rent/mortgage/ bills and energy, then there's no money to spend on anything else. No eating out, no leisure, no holidays.

Surely a huge recession will follow.

And what if a much higher proportion of people need benefits?

@BrightYellowDaffodil - literally!
Those who are really genuinely poor aren’t gonna be affected by negative equity and falling house prices, those of the people that are genuinely gonna be hit hardest. everyone else will just muddle through and manage and scrape by until the good times return as they always do.

Remembers all the threads demanding furlough be extended and extended. Where do some people think the cushion has gone. This is just the start until we start franking again and drilling in the North Sea

It's all cyclical. I think property prices will stagnate whilst inflation increases salaries and when stabilisation occurs the current ridiculous multiplies will have decreased.

The casualties will be small businesses providing discretionary services: coffee shops, small restaurants, nail bars, etc. There will be a shift towards private health provision, additional regulatory activity (a national I'd card can't be far away), and possibly more provision of UK holidays if the cost of air travel rockets.

[quote Bringsexyback]@Clarabe1 - come on then Clara share your industry knowledge what was your typical timeframe from first missed payment through to actually implementing and taking possession of a property ?[/quote]
5 months was the quickest I remember - this is going back 20 years. I have been out of the industry for that long to be fair. Generally you receive a court summons within 3 to 4 months, your solicitor ( who you pay for btw) attends not you and if a resolution cannot be reached then the house will be repossessed. All this can be avoided if you are proactive and try to work out a repayment plan direct with the lender. If you ignore the demand your credit rating has gone and believe me the bank with their unlimited resources will win and reclaim the property. If you continue to ignore them you will find yourself unceremoniously evicted, locks changed and you knocking on the councils door. The key is to communicate. Its actually far harder to kick out a renter than it is to kick out a homeowner.

@Clarabe1 - ffs Can I just check that you have heard of the Mortgage Market Review (MMR) 2014?

It’s absolutely ridiculous to compare 20 years ago today I mean absolutely ludicrous

Can anyone explain in basic terms what needs to happen to be in an official recession?

What will that mean in terms of day to day living and costs?

How soon is it on the horizon?

What can be done to prevent it or keep the recession short?

If buying a house when is the best time in amongst all of this?

And even 20 years ago it was not five months from first missed payment to summons to court that would be kicked out immediately by the judge who would want to know what the payment plan proposition that had fallen apart was.

Absolutely people should always communicate with their banks when they’re in debt but to suggest the lending market is anything like 2003 honestly it’s just comedy gold.

[quote Bringsexyback]@Clarabe1 - ffs Can I just check that you have heard of the Mortgage Market Review (MMR) 2014?

It’s absolutely ridiculous to compare 20 years ago today I mean absolutely ludicrous[/quote]
I wish I could get your posts deleted for misinformation! Stop.

@ThroughThickAndThin01 people should and can do their own research to fax checked everything they read on mum as per the disclaimer at the top of the forum.

@reqding

Can anyone explain in basic terms what needs to happen to be in an official recession?

What will that mean in terms of day to day living and costs?

How soon is it on the horizon?

What can be done to prevent it or keep the recession short?

If buying a house when is the best time in amongst all of this?

A recession is when GDP growth is negative for two consecutive quarters. The Bank of England website has some good resources including videos and things: www.bankofengland.co.uk/knowledgebank/why-does-economic-growth-matter www.bankofengland.co.uk/knowledgebank/will-inflation-in-the-uk-keep-rising www.bankofengland.co.uk/monetary-policy

If there's one thing to know about markets it's that timing them is basically impossible. If you need to buy a house to live in, you're best off buying it asap, not stretching yourself too thinly but buying somewhere where you're not likely to need to move for a couple of years.

Why do you keep posting nonsense bringsexyback? Who is this judge who keeps kicking things out of court? Mortgage lenders follow a clear step by step process to repossess a house. They don’t just rock up at court shouting.

A quick Google reveals that a repossession takes six to nine months once the process has begun.

@Theluggage15

Why do you keep posting nonsense bringsexyback? Who is this judge who keeps kicking things out of court? Mortgage lenders follow a clear step by step process to repossess a house. They don’t just rock up at court shouting.

And that was my exact point actually if you read what’s written

fax check?

Do we still use fax?

[quote Bringsexyback]@ThroughThickAndThin01 people should and can do their own research to fax checked everything they read on mum as per the disclaimer at the top of the forum.[/quote]
@Bringsexyback honestly you are talking rubbish. The mortgage market review was brought in to protect the consumer from taking out a mortgage they cannot afford. In reality it protects the bank because anyone who has taken out a mortgage since this was implemented cannot reasonably claim they were sold something they shouldn't have been! Listen - you do what you want it makes no difference to me if you default on your mortgage. I can only give you my experience and I have seen it happen many times, people kicked out and not even realizing that the lender has been to court to apply for eviction and they didn’t even see it coming because they ignored the situation. If you think you can take a multi national bank on and win - good luck!

@Ionsion a crash wouldn't be beneficial to the younger generation, I'm afraid.

Unfortunately what most people don't seem to understand is that the private rental sector is crucial. Councils are desperate for private landlords to accept social housing tenants - including refugees - because they dont have enough houses to house them. These people will never be buying houses, regardless of how cheap they are.

There are good and bad landlords out there.

The bad ones don't invest in their property, don't repair, charge high rents and don't care about tenant welfare.

The good ones are the complete opposite. However you'll soon be left without the good ones, because they've had enough. The tax breaks have been cut, the energy efficiency targets are extremely expensive for a lot of landlords to meet (and don't apply to council stock, which is ridiculously under maintained) and the various certificates and licences required (all for fees, of course) make it economically unrealistic for a lot of landlords to continue. But each time the government - any government - imposes another restriction that increase in rent has to be passed on to the tenant, but it's the landlord that gets the blame.

And when they sell up, what happens to their tenants? Think on that.

Not enough social housing is being built. A large portion of people will never be able to afford to buy, even if landlords quit entirely. A lot don't want to be homeowners - owning and maintaining a house can be ridiculously expensive and they'll no longer have a landlord to call who will fix it all for them.

Banks won't suddenly lend to people who can't afford to buy just because houses suddenly become available and the deposits to gain mortgages won't suddenly appear in the bank accounts of the younger generation, especially with high prices in every sector at the moment. You will be losing landlords immediately, people will be made homeless when they sell up - of all ages and walks of life - and people won't be in a position to buy overnight. But the council won't be able to house them because it doesn't invest in its housing stock either.

There are definitely rogue landlords out there, but you'll be surprised just how crucial private landlords are. It's the rogue ones that need to be removed.

@ArseInTheCoOpWindow

fax check?

Do we still use fax?

Well apparently we’re still using the same repossession proceedings that we did 20 years ago so maybe it is faxed over …. Or maybe it was a predictive spelling typo

@Clarabe1 it’s nothing to do with taking on a bank it’s simply a case of the procedures that need to be followed and those procedures take a damn sight longer than five months and nobody is suggesting for a moment that one would just simply ignore the situation and not negotiate and speak to your bank about arrangements to weather the storm.
The facts are there an awful lot of avenues that need to be explored by the bank and the mortgagees well before it gets to court.
So whilst I realise some of you are getting all excited at the prospect of mass repossession so that you can snap a bargain, the chances are given how much money the government has thrown at keeping house prices high via it’s various help to buy schemes I don’t think any of us I’ve got too much to worry about.

As I said back in the 90s my DH had to places repossessed he was left with around 35k shortfall as they were sold at auction
He went bankrupt to avoid paying the shortfall
They then pursued his ex partner who was also on the deeds for the shortfall as she didn’t go bankrupt
Back then they could chase you for up to 12 years for the shortfall on the mortgage
His ex wasn’t able to go on the deeds of her new husband house because of they were still chasing her for debt years later

[quote LimaCharlieHotelPapa]@Ionsion a crash wouldn't be beneficial to the younger generation, I'm afraid.

Unfortunately what most people don't seem to understand is that the private rental sector is crucial. Councils are desperate for private landlords to accept social housing tenants - including refugees - because they dont have enough houses to house them. These people will never be buying houses, regardless of how cheap they are.

There are good and bad landlords out there.

The bad ones don't invest in their property, don't repair, charge high rents and don't care about tenant welfare.

The good ones are the complete opposite. However you'll soon be left without the good ones, because they've had enough. The tax breaks have been cut, the energy efficiency targets are extremely expensive for a lot of landlords to meet (and don't apply to council stock, which is ridiculously under maintained) and the various certificates and licences required (all for fees, of course) make it economically unrealistic for a lot of landlords to continue. But each time the government - any government - imposes another restriction that increase in rent has to be passed on to the tenant, but it's the landlord that gets the blame.

And when they sell up, what happens to their tenants? Think on that.

Not enough social housing is being built. A large portion of people will never be able to afford to buy, even if landlords quit entirely. A lot don't want to be homeowners - owning and maintaining a house can be ridiculously expensive and they'll no longer have a landlord to call who will fix it all for them.

Banks won't suddenly lend to people who can't afford to buy just because houses suddenly become available and the deposits to gain mortgages won't suddenly appear in the bank accounts of the younger generation, especially with high prices in every sector at the moment. You will be losing landlords immediately, people will be made homeless when they sell up - of all ages and walks of life - and people won't be in a position to buy overnight. But the council won't be able to house them because it doesn't invest in its housing stock either.

There are definitely rogue landlords out there, but you'll be surprised just how crucial private landlords are. It's the rogue ones that need to be removed.[/quote]
Great post, spot on.

Turned the heating off, house is 13 to 14 but I will be ok. Food has gone up petrol will be £2 litre my april or maybe more. Life as we know it has gone at least for the foreseeable future. We will get through it hopefully and in time things will get better, fingers crossed.

Oh and in the 90s it took 16 months from when my DH said fuck it and walked away until they were sold at Auction

[quote gracedentssketty]@EverydayIsPJday - you can normally fix around 3 months before your current deal expires. Lots of lenders pulling cheap interest rates now and Bank of England meeting again on 17 March - if they increase interest rates again (not sure if they will given current situ with oil etc) then they may pull even more deals. If I were you I’d get investigating now.

We fixed at 1.29% for 5 years when we applied for our mortgage in Jan. Closest to it now where we are (Channel Islands) is 1.79 and I suspect that will go up soon.[/quote]
I completely agree. The fixed rate on my mortgage was up in February this year and I could remortgage without a charge from December I think. I dithered for a few weeks and considered changing to another provider, didn't change and eventually settled on a 2 year fixed deal with the same provider. In the time I'd dithered the best interest rate deal had already gone up! and having seen what happened now I wish I'd fixed for 5 years.

Really feel for those with variable interest rates right now, it's a very scary time.

@Bringsexyback I agree repossession is a last resort. I don’t think there will be mass repossessions either. The situation is different now. We don’t have the ridiculously high interest rates that tripped previous house owners up. Well for the moment we don’t anyway.

Unfortunately what most people don't seem to understand is that the private rental sector is crucial. Councils are desperate for private landlords to accept social housing tenants - including refugees - because they dont have enough houses to house them. These people will never be buying houses, regardless of how cheap they are.

It’s seeing property as an investment rather than a home that’s caused the shortage. It’s hard to get a mortgage currently because of massive deposit on over priced housing. renting ( which you have to do in order to have a roof over your head) is ( literally)extortionate.
If landlords crash and burn then it frees the market for first time buyers which in turn suppresses the market for renters as they leave.

Anyway. It’s coming quickly. Normally it is the better off who get stung in a recession with house prices falling. It’s the basics this time round. Ironically Covid means the richer section of society have more money accumulated over Covid.
I think it’s very worrying. Business can’t sustain £2 a litre fuel prices, gas, electric rises and a decline in customer spending power.

[quote Clarabe1]@Bringsexyback I agree repossession is a last resort. I don’t think there will be mass repossessions either. The situation is different now. We don’t have the ridiculously high interest rates that tripped previous house owners up. Well for the moment we don’t anyway.[/quote]
The high interest rates were only one factor. The entire economy was fucked.