5% mortgage rates

[SaturdayGiraffe]

Just read this article saying to expect 5%+ rates shortly.

https://www.theguardian.com/business/2023/may/25/uk-homeowners-and-first-time-buyers-warned-to-brace-for-5-plus-mortgage-rates

UK homeowners and first-time buyers warned to brace for 5%-plus mortgage rates

I just don’t know how people are going to cope, and it could go even higher.

I didn't say without salary rises. I said without large salary rises, often professions with a fairly foreseeable progression. Not people with average salaries/ regular jobs.
Have a look at the video. He explains this v well with lots of data.

Looks like 6% base rate is pretty much baked in by the end of this year. The news just seems to be getting worse by the week.

Of course not. I have absolutely no issue with people inheriting money. It’s just that people who benefit from inheritance often say ‘but I had to lose someone I love to inherit’. Just pointing out that everyone loses people they love, but not everyone benefits from inheritance.

@Twiglets1 following with interest. Don’t mean to be offensive but I think your posts are coming across a little entitled to be honest because you are applying your own anecdotal experience as evidence and seem to think your circumstances are universal

your daughter can afford to buy a one bed flat in London - so statistically she earns above average - most people can’t afford to buy in London.

Many FTBs now are in their 30s so have children or are planning to have children but are constrained to living in a small flat somewhere

yes FTBs in the past would have had to buy flats - but presumably they wouldn’t have had children? Parents and their kids need more space than a 20 year old something

you also acknowledge that you have moved up to your current place due to an inheritance. So you accept that you wouldn’t have been able to without

yet you are criticising FTBs who want to buy with a bit more space at the outset precisely because they may not get an inheritance to buy a larger house down the line

also people progress in their careers but salaries don’t necessarily increase

you are very privileged and are failing to see that

And everyone loses people they love - but many many people do not benefit from an inheritance

no-one would begrudge people who get an inheritance - but it’s absurd to say that people should be able to rely on that or indeed salary increases to buy bigger houses - because those means aren’t always available

MIL bought a 1 bed flat when she was 27 and newly married. Her ex was 6 years older. She was in that flat for 7 years until she upgraded to a house and she had 3 children in that time. My DH's earliest memories are of playing on the staircase of the 1 bed maisonette which is why he still hates period conversions. He likes purpose built flats. He had a school friend who lived in what he thought was a very posh new built 2 bed flat (family had 2 kids).

It wasn't that uncommon in London to have young children in flats even in the 1990s. Now it is almost ubiquitous. In fact even for higher income people, the standard practice is to stay in the flat while the woman is on maternity leave and then move shortly after the second child reaches primary age. This enables the couple to pay for full childcare maximizing their earnings in later years.
Which means that the buggy stage is in the flat.

Re the people saying rates got up to 15%, were rents also super high as they are now?! Problem now is that rents are also crazy expensive so a lot of people are finding themselves grinding to a halt financially with regards to their accommodation

Also at 15% how long were the mortgage loans for? Seeing loans for 35 years even at 5% seems pretty steep on the amounts of money it takes to get a house now. I'm 37 so didn't see the 15% rates did see the huge boom and all the excitement that came with it in the late 90's!

1 in 5 new mortgages is for 35 years or more. It's a completely different ballgame now.

It was 15% of a much much smaller amount. It also started from a higher amount.
House prices loan to wage ration, was also a smaller percentage of wages.

@Oliotya yes but how long were the 15% mortgages that people speak of in the 80's etc? Just wondering in comparison to today.

It’s a shame if people get annoyed by other people inheriting money. It generally only happens in your 50s or later after the death of a parent.

Why is it a shame? Everyone loses someone but not everyone gets an inheritance. It's a bit regressive that what you inherit rather than what you earn determines your chance of owning in places like London.

True, but is that a reason to get annoyed by people who do inherit a share of a property from their parents?

tbf people are probably more annoyed at the disparity between tax on wealth vs income.

Oh I've no idea. A quick Google didn't reveal any stats far back. I'd also be interested know.

I do acknowledge that I am privileged in some ways.

But I would never have felt entitled to move straight into a house as a FTB. Or to stay in the area I grew up in as that had become too expensive for our public sector salaries.
I already had a house before my inheritance so that is really a red herring to this debate. It took many years to get a semi detached house in a good area so I find it a little surprising when I hear FTBs complaining they can’t buy a house in the area they grew up in or their preferred location.

Buy a flat in a different area then? Buy a terraced house in a non preferred location? That’s what we did 🤷🏼‍♀️

How many FTB’s have you heard complaining about those things? And do you think no one of your generation had the odd moan about not being able to afford the things they wanted, before going on to buy what they could afford? We moved 150 miles to be able to buy our first house as we were completely priced out of the area we lived in (and loved). I definitely had a little moan about it, because I’d have liked to have stayed where we were.

It’s a shame because it’s just jealousy isn’t it? It doesn’t hurt the people who have inherited money from their parents, it only hurts the people feeling the negative emotion of jealousy.

wages were higher proportional to house prices, but still people lost their houses to the banks

I’ve seen a few people complain about it on Mumsnet recently.
Of course people always moan about not being able to afford what they want, myself included back in the day.

And there was probably no Mumsnet back when you bought your first house, so probably saw less of the moaning that I’m sure happened.

It’s a shame because it’s just jealousy isn’t it? It doesn’t hurt the people who have inherited money from their parents, it only hurts the people feeling the negative emotion of jealousy.

It's not jealousy though. My parents & in-laws have homes worth close to 2m each. Of course it's unfair that dh & I can potentially inherit a large portion of that just because our parents got lucky. I can see why others who have seen wage stagnation are pissed of that they can't get on the ladder. Society should progress & working should pay. Why should nhs staff suffer shit wages so I can inherit a load of money?

But I would never have felt entitled to move straight into a house as a FTB. Or to stay in the area I grew up in as that had become too expensive for our public sector salaries. I already had a house before my inheritance so that is really a red herring to this debate.

We moved a bit further out to move from a flat to a house in London. I moaned about it.

But I would never have felt entitled to move straight into a house as a FTB.

Why is it entitled to move straight into a house?Its what I'd do as a FTB now as I would be stung by stamp duty.

My husband works in the NHS too. What has that got to do with your in laws leaving family their houses when they die? You could always donate the money to the NHS if you feel badly about it?

I think it’s entitled if FTBs think they have a right to move straight into a house because flats are generally cheaper so if you can’t afford a house it’s logical to buy a flat. Two bed if you can afford it.
It may not be ideal but that’s life.

My husband works in the NHS too. What has that got to do with your in laws leaving family their houses when they die?

Because salaries have stagnated & assets have inflated & income is taxed disproportionally to wealth. I think the gov should come after that wealth in order to pay those in the nhs etc a decent wage & would vote for a party who does this. You disagree obviously.

Can you explain why thinking it's regressive that what your parents have & leave you is more important than what you earn is just jealously?