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?

[Jolinar]

@crossstitchingnana

In 1998 a five year fixed was at about 7%. That would kill people today with house prices what they are. Back than you could get a house for 50k.

We bought our first house in 2009. We got a 5 year fixed at 7.5% which was a good deal at the time. Our first time buyer house was £180k, which was as cheap as we could get where we were buying. We'd have had to move jobs, friends etc to get a cheaper area (or commuting costs would have taken up any mortgage savings).

[Nothappyatwork]

@SwanBuster

Good god. If you can’t see any problem with that type of fiscal behaviour then We have no hope. .

What then is the difference between an ‘aspirational voter’ and a renter family working minimum wage who needs benefits to top up their income because corporations don’t pay genuine living wages?

An asset?!

’Just give me some time to get another role suitable for my talents - I have aspirations. Take the money from those who earn minimum wage- they are draining society’

And if you can’t say why that would be more palatable to the “squeezed middle” voters there’s no hope for you. Millions of people who will need the NHS in the next 20 years voted to shaft the NHS in the last election there’s no logic being applied here.

[SwanBuster]

@Nothappyatwork

And if you can’t say why that would be more palatable to the “squeezed middle” voters there’s no hope for you. Millions of people who will need the NHS in the next 20 years voted to shaft the NHS in the last election there’s no logic being applied here.

I really hope Bailey turns out to be a Volcker just so that the certain parasitic elements of your ‘aspirational voters’ with their mortgaged buy to let shitboxes and rachmanian aspirations get fucked big time. Because what you are proposing as acceptable is utterly without conscience.

[Nothappyatwork]

Awwww, you ok hun ?

[SwanBuster]

@Nothappyatwork

Awwww, you ok hun ?

oh I’ll be fine 👍 I have plenty of resources and plenty of skills. the parasites who’s only skill is collecting rent, they might want to skill up in flipping burgers.

[SwanBuster]

Especially when they’ve declared their rent seeking activities even extend to their own families 🤦‍♀️

[stayinghometoday]

@likeminded

This is a good thing. House prices need to come down and the Government need to stop encouraging people to get into huge amounts of debt so that boomer house prices can remain propped up. Before the housing bubble, people could only borrow 3 times income and society was much more stable and people had money to spend elsewhere and society was much more balanced because housing did not suck up so much of peoples income. The only people that benefit from high house prices are boomers, landlords and bankers. The rest of society suffers.

Which was when according to you? Because borrowing 4.5 times our income was pretty normal 20-25 years ago.

[mama93345]

@SwanBuster still going then!

[LionessesRules]

We were offered 5x joint income in 2007.
We laughed at them, and took 3x.
Friends had a 105% mortgage earlier than that. Possibly around 2005?
Interest rates have plummeted since then.
Borrowing has been very cheep for maybe 15 years. A correction is happening.

[JugglingJanuary]

@WellThatsMeScrewed

The area we live in is full of elderly couples living in large houses. You can only get a house if they either die or go into a home. There a lots of big family homes full of single/couples, crazy. This is not even an expensive area just an average area.

Sorry, us older, single, people don't want to live in one bedroom shoe box apartments, with no garden, just to please you. Sorry, not sorry.

[Jolinar]

@SwanBuster

oh I’ll be fine 👍 I have plenty of resources and plenty of skills. the parasites who’s only skill is collecting rent, they might want to skill up in flipping burgers.

Do you not think there should be any landlords?

[SwanBuster]

@Jolinar

Do you not think there should be any landlords?

I don’t think there should be any with mortgages, no. I think that housing is too essential a commodity to allow leveraged speculation in. If you can buy a place with cash, it’s fair play and works better because the landlord isn’t then in the situation we find many in …

So yes - I definitely don’t think that landlords who have over paid and over borrowed should be attempting to pass on their increased costs to renters. They f**ked up their risk modelling. To try and pass that on to renters is disgraceful.

Rents will be determined by what renters can afford to pay. If there is a gap between that and the landlords costs, it is on the landlord to subsidise it out of their other income or sell up to someone who can afford to finance said asset. And if that requires a haircut on the asset price, so be it. That’s how markets should work.

[SwanBuster]

Not that I would ever buy a place to rent with cash. Disregarding the social issues and ethical concerns I have over shelter speculation, there are simply far better ways to invest money, that have the advantage of being much more liquid.

It generally seems the preferred option for people who fail to understand stocks or pension wrappers.

[SwanBuster]

Well, it's definitely happening now. Although I was very wrong this week as I thought the BOE would have actually gone for 0.75% rather than 0.5%, with the £ now toast there has to be some kind of intervention soon. They are so weak.

But mortgage rates will now be over 4%, maybe near 5% due to risk on the spread Vs gilts. It's done. There is no way now to maintain house prices at these levels unless we get severe wage inflation to go with the actual inflation we are going to see.

[jimmyjammy001]

Average house prices have goner up over £60k past couple year's, that just isn't sustainable, first time buyers who have brought during that time are the ones who are going to get screwed over, everyone else will have had their property increase by tens if not hundreds of thousands of pounds.
House prices are fixed by how much the banks will lend out and how much disposable income they have, over past couple weeks I've noticed in my area at least 75% of new listings are reduced priced listings because the estate agents have added an extra £40k on just to see if anyone is stupid enough to pay it and are now having to reduce

[everywoman682]

Oh god,^^ here she goes again, dying for a housing market crash. Yawn.

[boobot1]

@LionessesRules

But new buyers aren't going to be stress tested.
So over the past few years, you had to be assessed as affording a mortgage at 3% higher than current products (or similar, I'm not clear on the details). That has been dropped, so in theory you can borrow more right now, as interest rates haven't, yet, risen 3%.

I think we will just see longer mortgages like 50 years

[Puzzledandpissedoff]

The house prices in the past 12 months have been insane. People have paid vastly more than the houses are worth and it’s not sustainable
Those people that paid over the odds in the last year have likely paid at the very limits of what they could afford so I would anticipate a lot of people having to sell up or be repossessed

Exactly this

As seen, you'll get pushback from those who cried "the market's RED HOT" and risked borrowing far more than they could reasonably afford, and nobody pretends the situation's easy for anyone, but wishing for something not to happen doesn't change the reality

I was that borrower once, back in the days of 15% mortgage rates, and it meant buying a much more modest home than I'd have preferred, but rightly or wrongly that doesn't seem an acceptable option to many now

[rockyg]

I was that borrower once, back in the days of 15% mortgage rates, and it meant buying a much more modest home than I'd have preferred, but rightly or wrongly that doesn't seem an acceptable option to many now

I don't understand this point? Do you really think most people don't compromise? And don't forgot for many the red hot market still meant a cheaper mortgage than rent.

[rockyg]

I think we will just see longer mortgages like 50 years

Yep, I mentioned on one of these threads they would do something to stamp duty. Never underestimate the lengths they will go to in order to prop up the market. I do think we are in for stagnation though. The days of making 200k in 2 yrs are gone for most.

[Puzzledandpissedoff]

Do you really think most people don't compromise?

I wouldn't have said "most", no, but I stand by the "many"
At least IME the idea that someone can't have exactly what they want and have it now is just too prevalent, though sadly that's likely to change

[wottabargain]

In my opinion the stupidity of the housing market all started when the banks started upping the x rate you could borrow. So me and DH (now ex) could borrow 1.5 x his wage and 1/4 of mine (I was the higher earner too!). Then it started to go up and up, by the time we split is was 4x joint wage. That couldn't possibly have any other effect than to lift house prices. God knows what it is now! Oh, and only ever over a max of 25 years.

[lannistunut]

I am very worried that the government has no desire to protect people in the near future, we are all just collateral damage in this. I am expecting to see repossessions start to creep up as interest rates rise - yesterday's budget makes it likely interest rates will rise even higher than were predicted last week, which will heap more economic pain onto a lot of mortgage holders.

[Damnautocorrect]

@rockyg

I think we will just see longer mortgages like 50 years

Yep, I mentioned on one of these threads they would do something to stamp duty. Never underestimate the lengths they will go to in order to prop up the market. I do think we are in for stagnation though. The days of making 200k in 2 yrs are gone for most.

Which is a good thing as the wage increase and ability to save the extra deposit for that 200k just isn’t there.

[Damnautocorrect]

@lannistunut

I am very worried that the government has no desire to protect people in the near future, we are all just collateral damage in this. I am expecting to see repossessions start to creep up as interest rates rise - yesterday's budget makes it likely interest rates will rise even higher than were predicted last week, which will heap more economic pain onto a lot of mortgage holders.

They don’t. They really don’t. they don’t give a shit about any future, this week they’ve passed legislation to utterly desolate wildlife which will have catastrophic affects for us and our children.
I’ve never seen statements from charities like RSPB as I have this week.

the propping up of the housing market in 2008 had the same affect. It needed to drop then. They only care about appeasing donors and keeping in power to keep the donations (we could call them bribes at this point) coming.