To think the tories want a housing crash now

[Seagullsbythesea]

All the rhetoric around interest rates has suddenly changed- lots of papers quoting Hunt saying he’ll risk a recession to get inflation under control- lots of papers saying we might see 6 percent by the end of the year.

Seems like they actually WANT a housing crash now- why now?

My friend’s mortgage has just gone up £500 a month.

I am spending more not on extras I could cut out, but on food, fuel, mortgage payments and energy - none of which I can stop doing.

There is lots of talk about baked in inflation and how stubborn it is and how it now more structural.

Housing costs are now hitting people/children/GC in media and political class so it's hitting the media much more - but they can't easily build more in all area where it is needed because of local opposition sometime with good cause - strain on local services and sometimes nimby reasoning - but it tend to be a section of their electorate that doesn't want build but wants workers and services.

They also find it a reason why younger votes hitting middle age are less conservative than pervious generations because they have less of a stake in society.

It's not easy to build number of needed houses in areas they are needed - so there's lots of talk around the subject and little action.

Eventually our population is predicted to fall and that's been speculated to be a 2% a year pressure of house prices but that's a decade and half away.

Not sure why your friend didn't switch to a fixed rate months ago, you can negotiate with the lender to get out of the current terms.

Property prices have become ridiculously inflated and the correlation with average earnings has been blown apart. Millions of young people now have no realistic hope of ever owning their own home.

Unless the BOMOD steps in. Salaries are probably less important vs if your parents/gps can help you & when they did. I know people in their 30s with 1m property but ordinary jobs because they were helped onto the ladder at 20 before things went crazy or they have received 500k plus inheritance.

I don’t think it’s going to happen. Could be wrong.

If it does happen I don’t think it’s going to play out like those who think this is their chance think it will. Cash buyer will be king. Mortgages will be unattainable or the same price as previously anyway due to interest (even if the list price is pittance).

If we do have a mega crash and combined huge interest rate rise; well I could easily lose my home in the Midlands. That is realistic.

Whats also realistic is my parents aren’t going to see me and my one year old on the streets or in a bed sit. Would be a good opportunity for them to add to their portfolio and would likely buy property in London. Which is where I am from and would be if it wasn’t for the current prices. And there’s 100,000s of ‘me’s’ all over the country. The comfortable boomer offspring middle class. Sounds awful but it’s reality.

I don't think there will be a crash but maybe stagnation.

And there’s 100,000s of ‘me’s’ all over the country. The comfortable boomer offspring middle class. Sounds awful but it’s reality.

I probably fit into this but actually think the government (whoever they are) will target this wealth as there isn't really anywhere else left to target & the coffers are empty. Obviously there's aren't going to improve with the shift in demographics.

I am sure they will try but realistically they are also in a difficult situation to do so. This age group are mostly mortgage free, have good stocks, savings and pensions, large assets, and are retired or coming into retirement swiftly. Lots also have quite well organised finances with trusts etc. What can they do. Not much tbh

I assume care in the home will be looked at again (Teresa May tried) or it will happen by stealth eg that op has a 2 yr waiting list or there aren't any carers available to visit you.

They could look at CGT & IHT. I don't think the average person with their main wealth tied up in their house will have used financial advisors & spent money on trusts tbh.

Personally it does feel wrong that my mum for example can get a lot of value out of the NHS but the people treating her have to tolerate crappy pay & high living costs so that doesn't have to pay me & she can pass on a 1m house to me.

she doesn't have to pay more

is what I thought I typed!

I believe in free nhs care. Tbh your mum is unlikely to want free nhs care home care when she sees the state of it. Most with means will likely go for the private sector - as expensive as it is. I hope my parents do and if they don’t have capacity well I will ensure they do. Some care homes are honestly disgusting! So that’s my inheritance potentially gone and so be it. I hope by then I am in a less vulnerable position re. equity, mortgage payments, childcare costs etc.

Local housing allowance rates haven’t increased. Most claimants have to request discretionary housing payments to top up rent. It’s a terrible situation.

For those who say ‘get a job’ most are working but in low income jobs, can’t afford childcare etc. Even if they worked full time, rents are £750-£1,000 a month and that’s a terraced, small, 3 bed with no parking and you’d need a car due to location.

I think you might be unpleasantly surprised.

Many accept both private and government funded, using the extra money from one to cross subsidise the other.

I've been in £££ private care homes that were appalling and council owned ones that were great. Money buys nothing really - they pay the staff the same pittance.

It's not about housing at all. It's about the Tories giving the impression that they are in control of the nation's finances, which is well received by the markets.

I think you see them as much more joined up and purposeful than they have shown themselves to have been these last 13 years. So, no, I don’t think they want, or are trying to engineer, a housing crash. They are just crashing about not really knowing what they are doing and with very few plans or policies.

We bought our house 4 years ago for 350K as cash buyers. The house next door (identical to ours) has just gone up for sale for 725. The prices are ridiculous atm and unsustainable. I feel sorry for anyone with a mortgage with the interest rates going the way they are, plus living costs being so expensive.

We bought our house 4 years ago for 350K as cash buyers. The house next door (identical to ours) has just gone up for sale for 725

😂

They can put it on for what they like...doesn't mean it will sell for that.

Either your house was hugely, massively undervalued OR the house next door is far better than yours and not, in fact, identical.

But no. Despite the craziness and the boom, a house valued at £300k in 2019 is not now valued at £750k with no other changes 😂

Sorry, figures muddled... £350 and £725. Same thing though!

Extending the term of your mortgage could be another option, it would lower your monthly repayments.

All the new properties on the market in my area are ex rentals. Landlords are selling up en masse here and it's getting a lot of first time buyers on the market.

The fear of a crash and higher rate mortgages alone seems to be doing the trick.

The government has made harder and less profitable to be a landlord, that's why they're all bailing. The state interest rate rises are just an added bonus.

I work in care myself. Good for those who have good council homes. But to say money buys you nothing is absolutely absurd! It buys you choice.

we rent and can afford to buy this house, we have saved for over a decade to get a good deposit. We couldn’t buy when it was cheaper because of affordability checks (which often penalised renters)

we had no parental help or additional income to save a deposit.

however now because of interest rates when we though we had caught up enough with wages it pushes most houses out of our reach again.

we have only just the past couple of years had any holidays and that just camping in the UK. We don’t over spend and keep allot of costs down where we can and save a good portion of our wages each month.

we have done all the sensible things but are being priced out due to high costs especially how much it’s rocketed since covid, missed out on a lot of things we would have wanted to do, to ensure we’re being sensible with cash.

we don’t have the coffees and eating out all the time trope that is levelled off and we have two earners in the house.

a pricing crash would help us, however I’m also aware that the most likely beneficiaries wouldn’t be people like us but richer commercial enterties and large scale landlords hooving up the properties

we have seen some of that as well.

it’s frustrating as a lot of these properties were not available before as they were scooped up as investments and meant the houses a liable were often bigger ‘second ladder’ homes. This caused us to be trapped renting far longer than we have needed to be

House prices seem to be high worldwide.
Populations are rising.
Just looks like it will continue.

Yes. I'm a homeowner and I agree.

But sellers are also buying at inflated prices so the chain continúes.

Naturally the sellers will want the best price n buyers the lowest so a compromise.