What actually happens next? Housing and base rates?

[Lalalalawhitenoise]

renters and people who’ve bought their houses in the past 10 or so years, more so last 5 years, borrowed within affordability etc, all these rises, it will see people who’ve been in a position to save £1000 a month living pay cheque to pay cheque. Downsizing not really an option for most as stamp duty and then the general rise of house prices would mean what you paid for a 3 bed you’d need to spend for a 2 bed. Rental market has always been above mortgages in terms of what you get for your money… so those rises will hit private renters even harder.

what seriously Comes next? Mass defaults on mortgages? Surely that can be good for the banks? We don’t have enough social housing as is… seriously what happens next?

It’s all relative i suppose but our mortage is 210k or will be by the end of the year and we pay 750 pcm now, rates before this hike was putting it at about £1200

I’m more angry about that prick Andrew Bailey saying that people are irresponsible asking for pay rises in order to deal with this absolute clusterfuck whilst he pockets over half a million quid a year. Hypocrite

We paid 9% NI on top of 33% income tax. So everyone paid 42%. Only 5% of the population could access higher education.

It is quite easy. This is not a confession - I am cautious with money - but I can think of a fair few people who've managed to borrow a lot more than they can sensibly afford. A few I've wondered how on earth they've done it, with sketchy job histories and most of their income through benefits.

I really get the impression that the government are suddenly very keen for us to think the banks are the issue here and not that people are already broke due to the Tory's utter incompetence and corruption.

Agree totally with this. Also public services have also been cut to the bone over the last 13 years - NHS, social care, education all on its arse. It's like they're trying to make life harder for everyone and succeeding.

This makes me ragey.

I'd say the problems with our economy have much more to do with the rich absolutely rinsing it than anything the poor/middle earners are capable of doing. Nobody has suggested a cap on executive pay but us plebs can't ask for payrises in case we break the economy. Fuck off.

I agree with this

It's not even the upper middle class/upper class earning £500k a year which is the issue.

The real issue is that the UK does not charge anywhere near enough tax on overseas corporations operating here. There are far too many loopholes to escape paying taxation.

If it gets too high we’ll just cut the plan of ever having children, probably the same as a lot of other people in late twenties and early thirties.

I lived in a shared ownership house in south Cambridgeshire, one bed, was the size of a flat (about 800 square foot) but was a tiny end of terrace house with a garden. Super lucky to get it, and when I sold last year it went within 24 hours of it being on the market last year as nothing else affordable nearby. It was still 240k and was £850 a month with super low interest rates. As the rent element was based on interest rates and shared ownership mortgages being higher, I imagine you’ll be looking at approx 7% on it with mortgage and rent combined. So £1400 a month. And genuinely couldn’t downsize! I was also looking at private one bed flats which were the same price as the house.

That’s so frightening. It shouldn’t be affecting family choices.

Yes, and seeing as over 90% of UK businesses are SMEs who can't get the same tax breaks (or capital), that means they're pushed out by the tax-dodging corporates, which results in even less money in our economy (and edges us towards recession). The Tories are supposed to be the 'party of business' but they're useless at that too. They have made an almighty bloody mess of everything.

We have our deposit (finally) but we would be stupid to buy now. the rates mean we can only afford a tiny property, like a one bed flat or tiny two bed house. These are in short supply AND it would be foolish moving there to find at the end of the 5 year fix, we have a toddler and another on the way and need a bigger house but oh no, prices have fallen and we’ve lost our deposit completely or worse owe the bank more money than we took out, meaning negative equity and onto the lender’s standard variable rate. Not to mention repayments would be over £1000 for a tiny property. We would be paying at least 500-700 more than we pay in rent, which is our slush fund so would be sleepwalking into hardship.

It’s hard not to moan because we work hard and earn well and could’ve bought a year ago but for now we are just making the most of our secure rental (housing association) and have resigned ourselves to the fact that we will make the best of this home and start our family here. Everyone deserves secure and affordable housing and it is so, so wrong that working professionals can’t buy property in the UK in 2023.

@horseyhorsey17 The salary for the Governor of the Bank of England role should be capped at the level of the Prime Minister. They are a public servant if he is not doing the role to serve the public’s best interests he is in the wrong job. If excessive salaries fuel the issue then he should lead by example. If a private sector salary is important to him, then he should fuck off to the private sector. If he wants individuals and businesses to be morally responsible when it comes to pay then he needs to lead from the front.

But the stress tests didn't account for rampant food and energy inflation at the same time.

We’ve definitely stopped at one child because of finances, and we both have very healthy salaries and secure jobs. This plus nursery fees plus everything else going up means we just can’t afford it.

I’m more angry about that prick Andrew Bailey saying that people are irresponsible asking for pay rises in order to deal with this absolute clusterfuck whilst he pockets over half a million quid a year. Hypocrite

You will own nothing and be happy.

You'd have to be an idiot at any time to not ask for a pay rise if the opportunity presents itself in the opinion of anyone else in the real world.

Well possibly but the idea that people are really going buy into 'I declined my pay rise' as the latest facebook virtue signalling is truly deluded. But then some recent virtue signalling has been truly odd so you never know what the 'better than me' people will do next.

Fair comments, but there won’t be 25 years of quantitative easing following the current property slide / crash which helped fund the average 6.5% compound growth in house prices over the previous 25 years…..

I’m really worried about this. We have 2 years left on our fix, but when it’s finished we will owe about 147k. Our house isn’t expensive and worth around 230/40k in todays market. Even though I don’t think our mortgage is particularly big im worried about how much the increase in the payment will be, some people on here are saying their mortgages are going up hundreds a month

I wouldn’t worry it’ll probably be the difference of 150-200, not great but can be done for most with cut backs.

You’ll be fine, predictions are by 2025 things will level out… you might pay more but it won’t be as astronomical as say me, I might start a thread for advice actually

The guess is that interest rates will either stay the same for 3 years or go up again.

It should be noted that 2 people on the bank's committee voted against interest rate rises.

Regardless you will need to put in some of your savings to reduce your mortgage.

And yes I would be kicking myself for not taking the 3.5% last year. Simply as I guessed interests rates would continue to rise.

Some people will really get hit badly. Years of low interest rates lulled people into a sense of security. Lots of people have tracker mortgages which mean their payments are increasing just as inflation is hitting so massive squeeze on earnings. There will be defaults, sadly I remember the last time this happened with 15% interest rates. Hopefully it won’t be nearly as bad if interest rates stay at 6-8%. House prices will drop as people will need to sell, rather than wanting to. Fewer people will choose to trade up so the housing market will be desperately quiet.

Ok so in your position I would be looking at if you can afford the additional mortgage cost, cutting back on everything you can? If yes then do that first. If no, then you’re going to need to look at in reading your income such as increasing hours or one of you taking on an extra evening or weekend job, or asking the bank to transfer temporarily to interest free for a couple of years until your childcare costs go down. Can you do any of those?

You can fix 6 months before your current fix is up usually so you should start looking to lock one in now ready for December.