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 think I need to repeat myself:
Are you seriously suggesting that it is FTB's inability to commit rather than BTL mortgages and a whole host of financial, political and economic factors (active choice made by politicians and bankers) which have raised the price of properties?!

Yet by your own admission you also know several high earning young people who have already bought - they were FTBs that bought.

I think you had some bad experiences personally and have extrapolated that to thinking most FTBs are flaky. Some are, of course, but most are committed to the home buying process.

They just like the thrill of paying for surveys on multiple properties.

But they were quite young when they bought. They were the ones who were buying over the chicken shops before most people have left university.

To be honest that might not be far from the truth.

So? They were still FTBs.

Or do you think it's only university education young people who are flaky FTBs?

Maybe its best to ignore these comments, not saying that is the case with this poster but I do wonder if some of these posts are just playing devils advocate.

It is very difficult to compare different generations as so much has changed between when my parents bought, when I bought, when my adult children bought. There are also vast differences between the regions. The rented house in which my mother grew up sells for £50k near Sunderland, My son's first little terraced house costs about £325k as is the SE. He moved to Oxfordshire for a detached new build costing about £305k - so in other words moving further away to get more for his money as he wanted to be detached (lovely Bellway house by the way, no snagging). However I realise that even in the SE most people cannot afford to buy even at a £300k purchase price.

Lots of people will not live out here in zone 5 outer London where I live but that was all we could afford in the 1980s. Life is full of compromises and luck - I have helped my children buy and was happy to do that . However I understand many other women my age either cannot do it or don't work full time or don't want to for very good reasons. Luck to an extent as well as what job people pick and wages in those jobs.

What the fuck? That was your credibility, leaving the building.

Not in line with stats.

https://www.rightmove.co.uk/news/articles/property-news/graduates-are-more-likely-to-pass-the-first-home-ownership-test/

I remember reading one stat that only 8% of non degree educated Londoners under 40 are able to buy their first property. It's true tradesmen can earn a lot but then they are the 8%. It's like saying all lawyers are all guaranteed to earn £100k as a junior when it is only the US law firms who pay that so you should study law because of that.

Also what happens when interest rates stay high and it's a lot more expensive to take money out of your house value to build an extension. Demand would drop. I don't think most home owners who build an extension have £100k lying around!

The reality is that there is a supply shortage of housing. Historically, most people rented. There was a shift to the bottom half and working classes living in council housing. They were then allowed to buy it at a discounted rate, thus making them homeowners but they wouldn't have been able to do it without the discount. Now their children are unable to buy on the private market and have no affordable form of housing to live in while they save. Middle class people get help from their parents (mother in law bought a 1 bed flat in the 1990s with family help and some savings) and honestly husband and I bought at the same age (due to not needing to pay rent for three years at the family home). I think due to the cult of home ownership, some people have stretched and also due to income inequality (and other countries getting richer, hence more foreign money), houses in certain areas have become expensive relative to average incomes, but not relative to incomes in finance, law, tech.

And in such areas, 60k is regarded as a low salary and they tend to marry each other plus often have family money. However it is possible for such people to still be stretched as people assumed interest rates would be low forever and also the high cost of moving prompts people to buy bigger homes than they need.

As one of the demographic being disparaged on this thread (unrealistic expectations, entitled, flaky etc), here is my experience as a FTB.
We moved 150 miles to be able to afford a house. We viewed 3, offered full asking price on 1, which was accepted. We did everything quickly and by the book. Vendors messed us around, told us they would move in with family so there was no chain then the day before exchange told us they’d changed their mind and wanted to find a property first, which delayed everything by 3 months. We were ready to go for that entire time, but waited patiently.
So if we’re making mass generalisations based on our own narrow experiences, then I can confidently assert that FTBs are not the problem 😁.

I saw a beautiful 3 flat with double reception and private roof garden with real grass in elm park court in z5 and it wasn't quite cheap but when you tout up the commuting costs and needing to get a car, I think I am better off in a smaller flat in zone 3!

I saw a beautiful 3 flat with double reception and private roof garden with real grass in elm park court in z5 and it wasn't quite cheap but when you tout up the commuting costs and needing to get a car, I think I am better off in a smaller flat in zone 3!

What's the difference in commute costs? It can't be that high! A car is more expensive but I needed one once I had dc & I had to pay to bloody park on the street because I don't have a drive. I moved from z 2/3 to 3/4 & have noticed much different in cost but I think it probably balances out. When I was in a flat I went out more whereas I have more space now.

£400 a month excluding the cost of a car. £100 each for both of us plus I think £200 to run a car. Plus you never get that back.

DH's mum raised 4 children in zone 3 without a car but having been to pinner, I wouldn't want to do that there !

Zone 3 to zone 4 isn't that bad- east Finchley to Finchley central. Finchley central is just 20 mins walk for me lol so not much difference living there I believe. Also not too much difference price wise anyway.

It's zone 5/6 which is significantly cheaper price wise but then you really pay for the commute.

😂

£400 a month excluding the cost of a car. £100 each for both of us plus I think £200 to run a car. Plus you never get that back.

So is it £200 minus car costs?

DH's mum raised 4 children in zone 3 without a car but having been to pinner, I wouldn't want to do that there !

You can certainly do it but it depends on job, hours, activities your dc do etc.

It's zone 5/6 which is significantly cheaper price wise but then you really pay for the commute.

I know quite a few people who have sold a flat in 2/3 & moved to a house in 4/5. Don't know anyone who moved to z6 tbf. They've always said the house size & commute costs are worth it. A few could afford a house where they were originally but wanted more for their ££. I guess it depends on individual wants. Even if I could afford it I wouldn't pay 1.4m for a terrace with a tiny garden but likewise I'm not interested in a bigger house with a massive garden further out.

For zone 5 where I live it is usually necessary to have a car. Commuting is changing quite a bit eg my 2 sons who live at home have to bei n the office 3 days a week and are here the other 2 days working from home which is simialr I think for almost every office worker in our family - only 3 days a week (perhaps only 2 in weeks with Monday bank holidays) do you have to go into the office.

However there are pros and cons of anywhere and never been easy to decide where to be

I go into the office everyday, DH is hybrid but our priority is our careers. If a better job requires us to go into the office daily, then I would want my lifestyle to fit that.

If a better job requires us to go into the office daily,

That must be very industry specific. So many banks & law firms are moving premises in London as they realise how much they are saving.

I work for a big bank in London and they’re trying to get people back into the office currently. Not a problem for me but lots aren’t happy.

I agree being in inner London gives more scope for shorter commuting and even commuting by train out of London for some jobs. Every time we to anywhere from here in zone 5 it is basically an hour door to door. it can be a nuisance. Every family will have its own pros and cons. I think for young people being in the office every day is very helpful as you can learn more but it has been interesting watching my sons (who finished their studies last year) and how home working has gone. Going in 3 days week for them seems to be working well (and they have a sibling who doesn't live here at home who does the same - in office 3 days a week (also a lawyer)).

More on topic I agree it is the higher prices even in what has been a low interest rate environment which have been the big issue in the last 20 years. If you can get a 95% mortgage on a £300k place ( with (a) 2 professional full time salaries, (b) buying before you breed - the latter being the key for my parents, me and my children) that is £15k or £7500 to be raised by each person in the couple which is a lot to save particularly for those who cannot live with parents, find a job with accommodation included (rare except for live in nannies, priests etc) or room share whilst saving it.

I work for a big bank in London and they’re trying to get people back into the office currently. Not a problem for me but lots aren’t happy.

I said many not all....

Office space was already shrinking pre covid.

I know, I didn’t say you said all of them 🤷🏻‍♀️. Was just offering my experience, like everyone else on the thread.