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?

But people like me didn’t overstretch ourselves, mortgages rises would be one thing but it’s coupled with childcare cost rises (£12 per child per day in less than 3 years) then energy and food inflation etc, my bills even in summer are at a minimum £300 more, then childcare is about £100 more per month and that’s before the rise in mortgages. We’d borrowed in the middle of where we could afford, not accumulated debt, no fancy cars (really could use a bigger one but haven’t) we’ve had a few hols but nothing lavish. But these mortgage rises do fill me with dread. Now if the gov brought their funded childcare places forward to 2024 rather than 2025 wouldn’t be too much of an issue but as things stand, I think most will be like me, played it down the middle, saved for a 5 year fix to ‘ride out brexit’ and bam… buggered

We were stress tested to 9.9% but that was just the mortgage. It didn't account for the rise in everything else.

I honestly don't know what we're going to do. Our mortgage will be going up between £500 and £700 a month in a couple of months and our household costs have already gone up £400 a month this year. We can't sell, can't downsize, can't earn more (recent payrises). We're lucky that we can cut some outgoings but I don't think it'll cut it if I'm honest. We won't be able to save and the kids won't be able to do any activities.

From speaking to my DH what was different in the 90s was that very few people had a fix rate

most were on a variable rate so each time the base rate rose so did the mortgage payments

the 15 percent was only for a few weeks if I remember rightly

but where my aunt and uncle lived just outside of bristol you had a whole housing estate known as Sadly Broke - real name Bradly Stoke 😂😂 there was even a tv program on it 😂
loads of people just walked away left the keys in to r house and thought fuck it

my son just had an offer accepted on a house
he’s got a deposit of over 80k via an inheritance
He offered 10k under the asking price and they buy his hand off

it’s a 3 bed house totally renovated so he can just move in but he is taking in a lodger for the spare room
and both him & his partner want to do that si they should be ok

Most places you can pay a termination fee, not pretty but you can.

and what if they haven’t prioritised those things? What if they’ve lived modestly, done the things that only desperately needed to be done? Or replaced things that needed to be replaced?

what about if they went back to work after their pay or Mat leave ended like most people I know? The only people I know to have stopped working are those who couldn’t take the hit childcare cost wise, who’d have been spending more in childcare costs than taking home or people with children with additional needs (who don’t get any gov support)

What was it John Major said …”if it ain’t hurting, it ain’t working “?

sadly I guess for the interest rate rises to have the desired effect it has to hurt a considerable proportion of the population.

Probably that was before the cost of living crisis with inflation at 10%... No?!!

Right...

So you didn't do the things you said I was "spiteful" for saying were shortsighted and deserving of little sympathy?

You weren't someone who overstretched yourself with a big mortgage and then borrowed for extravagant home improvements and new cars on leases.

Not exactly sure why you've got a bee in your bonnet, then.

@Chulak

Why can’t you sell? Do you have negative equity?

Why can’t you downsize in terms of size or area?

If you can’t get a bigger salary, can you get a second PT job?

If you don’t think cutting your outgoings will bridge the gap, then then you might have to find a way to do one of the above? I would try speaking to your lender first to see if they will allow you to extend the term/interest only if that might help.

Shared ownership but that's also a big issue -
Harder to sell
Rents usually extortionate
People often stretching themselves to cover the mortgage in the first place as it can be first step on the ladder for people who couldn't buy any other way.
Not people who are making rash stupid decisions. People who want continuity and security, a place to call home and this was the only route available

Because I don’t think people ‘deserve what they get’ in terms of losing their homes? Especially if they have children. It’s just such an ‘im alright jack’ kick someone when they are down way of thinking

and because I could lose my home anyway and I see regularly on here it’s because people like me ‘overstretched’ ourselves, but people like me actually didn’t, circumstances beyond our control drastically changed and we did what we thought was right and smart and risk averse at the time (often based on financial advice/ mortgage advice)

Perspective is very important - there are around 25 million homes in the UK, but less than 30% have a residential mortgage. At an average 3 year term that’s less than 10% of the 25 million coming up for renewal, and as above many will be able to cope and/or will, rightly, prioritise housing costs. So the problem might just be 10% of that 10% - 250,000 people. Many of whom will reach a solution with their bank. We’re a way off a crisis I think.

Has anyone here had to get a second job? I do 40 hrs a week so not much scope weekdays?

anyone had any luck tutoring? I did it a while ago but it was unpredictable (my subject is a European language)

Raising VAT - depends what on but in general likely to disproportionately impact those who need to spend more of their money on essentials because they have less money

Key words here : "we bought 7 years ago.".

H2B helped the government inflate the housing market and transferred wealth to homeowners.
It didn't help to buy, it helped expose hardworking people to massive risks while making the cost of buying a house even more out of reach

Yes, I am a nurse and do bank shifts for a different trust.

I have a friend who does evening and weekend bus driving as a second job. Another does bar work.

It’s fairly easy to get PT work in my area to be honest. Loads of NHS workers have to do it on top of their FT jobs.

Not recently but I did when I had first graduated and needed extra miney. I did waitressing and bar work for events at the weekend, as my grad job was full time Monday-Friday. Lots if places are advertising for waitressing jobs at the moment.

If we needed it now I would go back to waitressing, I quite enjoyed it and it wasn’t bad money with the tips. Easy to get weekend work too.

Yep. H2B was never going to help buyers.

If you look at it this way, it's obvious why: If 100 people want to buy and there are 70 homes available, the 70 homes go to the 70 people with the most money to spend.

All H2B did was increase the amount the 70 most affluent buyers had available and so the sellers/builders got more money.

Giving buyers more money to spend doesn't change the fact that too many people are trying to buy too few homes.

We can't sell due to ongoing building work- I doubt it's currently mortgageable to anyone else and a cash price would be negative equity. We should be able to remortgage though as it's not subject to the same issues.

It's a 3 bed end of terrace with a loft room that doesn't have building regs, so is not a 4 bed - we use the loft room as an office for DH who works exclusively from home. We have 2 kids DS8 and DD9 so they can't really share. It's not a particularly large house and other 3 beds in the area would be a similar price. We also can't afford stamp duty, estate agent fees etc as we don't have a lot of savings.

We both work full-time and have good jobs, we just live in an expensive area. I'm not allowed to take a second job - it's in my contract. DH works really long hours do couldn't take a second job.

We're going to speak to the lender and see what options they have available, it's hopefully a short term problem that we need to weather as either our salary's will go up or the rates will go back down. And if neither happen, then we will have to sell once the building work is done.

Most people I suspect will be able to get through by having less disposable income. So a combination of people spending less which will feel a bit shit, doing second jobs, potentially downsizing, going interest only for a few years or extending mortgage years, then hopefully not too many repossessions.

My brother is a mortgage broker and he said a lot of clients have contacted him to ask for interest only mortgages until the hike calms down.

I am so, so thankful to him for sorting us out last year. He said last year that these interest rates are going to continue to rise and rise, and my rate was due to end 31 Dec 22, so on 3 July 2022, he secured me a new deal that was valid for six months, to begin on the first working day of 2023, allowing for bank holidays. He secured us on a 2.99% rate, which was still a £60 increase a month but absolutely nothing compared to what so many people are facing. I don't know how people will manage with the cost of everything else raising. I suspect many will do as he says and just switch to interest only rates until the interest rates drop.

I just double checked my emails with the interest rate on and it's 2.78%. I dread to think what the ££ value is for so many on the current interest rates. It's terrible!

It’s in no one’s interest for people to be made homeless as the council will have to house them and this country has zero social housing options and rents are higher than mortgages. Something will be done I think.

Well vat isn’t applied to ‘essentials’ in theory. It shares the burden out around the whole country not just mortgage holders.