To think the amount available to borrow for a home is going to be slashed?

[SwanBuster]

At a fixed rate of 1.5% for five years, a 250k mortgage offer would mean paying back £1000 per month.

Let’s say that’s what a given family might be able to afford as monthly repayments. These were readily available until recently.

It looks like fixed rates are going up fast … if they hit 5% then for the same ‘affordable’ £1000 p/m payment would mean they can borrow a maximum of £171k.

And if affordability drops further because of other expenses (let’s say they can now only afford 900 p/m because of rises in other bills), then that drops even further to about 155k.

what do you think the impact will be? AIBU to think this is going to hit the housing market quite hard?

@Grintyphop but the timeframe is from when the older cohorts would start to die, the theory wasn't saying the entire generation would die at the same time!

You were indeed lucky.
Some of us had absolutely no parental support, zero inheritance look forward to and still manage to make it in life.

I think you could be correct, OP.

However, as it stands there are still not enough new houses being built, and demand is still relatively high (though slowing down a bit now). So I think it's difficult to say whether this will be an imminent thing!

It's not fairy money if you have still have a million left over after downsizing

That’s why I said “unless you sell your house”. Most people don’t downsize sufficiently to realise that sort of money - or even have a house worth that much to start with. 2.4% of UK housing stock is worth £1 million or more.

@Nothappyatwork

I'm very grateful for their help as I'm sure your dc are.

Some of us had absolutely no parental support, zero inheritance look forward to and still manage to make it in life.

Of course, who would claim otherwise? My parents came to the U.K. with nothing.

@Blossomtoes but the boomer generation have the highest % of that wealth, don't forgot 1 in 6 have more than one home.

And a lot more than one in six own no property at all or live in houses worth considerably less than that. Most of those £1 million plus properties are in London and are owned by investors and six figure earners. Anecdotal I know, but I’m 69 and not a single person I know lives in a £1 million property - and that includes those living in London.

Not many boomers in our area own £1 million homes as there aren't hardly any, most of the houses are £200k-£400k or council houses and we start at about age 60 so I doubt that many of us will be popping off soon.

I haven't said all boomers are millionaires or rich just that they own a disproportionate amount of property wealth & benefit more than those trying to climb up it.
Anecdotally I don't know anyone over 60 who doesn't have a 1m home & at least another BTL or holiday home. All in normal jobs. However statistically boomers do have more property wealth than other generations currently.

@Grintyphop it's not my theory

www.ft.com/content/c69b49de-1368-11e9-a581-4ff78404524e

Obviously some posters are very short sighted and can't see outside London

We've just remortgaged on our first time home after 2 years. Gone from 1.47% to 3.8% and that's with a 35% deposit. A couple of hundred extra in mortgage payments not to mention the cost of rising bills 😔

obviously some posters lack critical thinking skills 🤷🏻‍♀️

That link is not just about property though, it includes pensions and other things as well, that is why they are millionaires

Precisely. Obviously the older you are, the bigger your pension pot, it’s not exactly rocket science.

I haven't said every older person is a millionaires or are only millionaires because of property.

Are you saying that older generations haven't benefited from as the articles states soaring property prices?

@Blossomtoes so you believe that boomers have more wealth just because of pensions?

I believe pension pots are a large factor, yes. And your nice little link says that, along with inheritance.

baby boomers have consolidated their position through “soaring property prices, inheritance and the prevalence of final salary pension schemes”,

We have more in value in our final salary pensions than our house

Same.

@Blossomtoes yes the link does say that because it's talking about wealth overall. However statistically the boomer generation has more property wealth & has gained the most from the inflation of assets post 08 than younger generations. You can disagree of course but I never understand the reluctance to acknowledge that.

not necessarily. The point is that the boomers also have much more pension wealth than younger generations will ever have. Private final salary pensions are now all but gone for gen X and z but boomers have them as well as housing wealth.

Lucky you that you get a pension which is no longer available to younger generations. Even public sector pensions are going to career average.

The point about the quote is that one of the reasons boomers are so wealthy is the “prevalence of final salary pension schemes” compared to now where there are few. Younger generations have now, and will have when they retire, much much less pension wealth than the boomers.