Are we all dooooooooooooooooooooomed?

[padboz]

www.bbc.co.uk/radio4/today/

the actually started mentioning the words 'full blown depression' - not recession - on the today programme this morning.

Am I going to need a wheelbarrow full of cash to buy a loaf of bread and a gun to ward off the rioters?

Fair points. Again, I would love to see some stats for the UK. I bet there are hardly any 20 yr fixed mortgages. 20 yr mortgages of any sort are unheard of for first time buyers...

Mercy, my reasoning is that all workers, private and public, should be treated the same with regard to their pensions. The old argument in favour of (hugely generous) public sector pensions is that teachers, GPs, civil servants etc are underpaid during their working lives and are compensated at retirement. I don't believe that this holds true anymore, for example GPs, who are treated as "businesses" with "contracts" yet do not have to compete in a market, cannot lose their jobs except in extreme circumstances and are still given taxpayer funded guaranteed pensions at retirement. There are of course a lot of badly paid teachers, lower grade civil servants etc but also there millions of badly paid workers in shops, offices and the service industry. In 30 years time, these people will have to work until they drop to finance their public sector colleagues. If there has been any underpayment in the public sector then I would rather see an increase in their salaries, again to make everyone equal. On a wider point, the public sector pension liability in this country is frightening.

Upwind - Here's the data:

10-yr fixed, variable thereafter: 5.49%
Up to 30-yr fixed: 5.74%

As a said, very little difference in rates. I can't understand why someone would go for 10-yr fixed then variable and not for 20-yr fixed.

There are apparently just a few banks who offer 20-30 yr fixed rate mortgages, but if there was lots of demand, I bet there would be more banks emulating them.

Thanks! But I meant the data on the percentages of people who are taking out the different types of mortgages. That could tell us aomething about how badly exposed people are. If a lot of people are coming off shorter fixed rates in the next couple of years the problems could be worse than they seem.

cote, we have just fixed ours for 10 years at 5.69%. In all honestly, if we could have done so for the remaining term of our mortgage (17 years), we would have done. There just doesn't seem to be that any around (and those that are around have ridiculously high application fees).

It's strange that fixed rates for longer term are so unusual in UK.

I think the lack of long term fixed rates goes with the philosophy of a "property ladder" where it is seen as the norm these days for people in their first job to buy a tiny flat, in the hope they can gradually trade up to a family home. Not all of them can.

In other countries, with decent tenancy rights, it is usual for people to rent until they are in a position to buy their first and last home. I think a house price crash will cause enormous distress here because of the lack of viable alternatives to home ownership.

I agree upwind, am I right in thinking that in many European countries, there is a certain about of regulation around tenancy agreements and rental charges?

I think people are going to start looking at the overall cost of the mortgage soon and not just the cheapest monthly payment in the hope of huge equity gains in a few years which is what has been going on recently.I truly think the days of making money on property are over and it will be seen as ahome and nothing more.Too many are relying on their houses to bail them out of their no savings no pension predicament

Do you mean that some people fix their rates only for a number of years because they intend to sell before the end of this term?

Kind of understandable (although risky) strategy for 10-yr fixed rate followed by variable. Totally incomprehensible for 2-yr fixed rate followed by variable.

What are these people thinking?

Considering that UK interest rate graph clearly shows that interest rates were unusually low in the last couple of years, wouldn't you expect rational buyers to opt for fixed rate?

Imo, this makes UK much more vulnerable than European market for the coming years.

When i was developing I knew 2 yrs per property was as long as I'd stay and generally was about 1 year.So I took the lowest monthly payment with the least fees and there were lots of these deals about and the capital gains have been so huge in teh last 12 years that it was worth paying exit fees sometimes if the equity was high.This is a risky strategy and I would never do it now as I truly believe property is going to be seen as a risky asset for years