Base rate just hit 5%

[LisaP1215]

Is there no end to these rises??!!

That is like where I live. There is one big FS company and if you can get a job there your salary is not that much lower than similar roles in London but your housing costs are way way lower.

Some of the homes in the South West have risen by huge amounts in the last couple of years, so many people have huge amounts of equity. New homes to market are really overpriced and people still pay. Lots of people have moved from cities to work from home here now and they have money to spend having sold in the South East.

Hopefully the price rises will stabilise and perhaps fall back a bit and stop people from borrowing more than they can afford to.

I will add that I have huge, vast sympathy for anyone who is a first time buyer trying to enter the market today

It wouldn't get you one in some parts or Hertfordshire!

It’s currently the worse mix. High prices and high rates. At least if there’s a crash it’ll help ftb.

You’d get a 3 bed detached possible 4 bed near me.

This exchange of comments illustrates the North-South divide and the ludicrous over-pricing of London and south-eastern housing absolutely perfectly.

Yes all on a virtually nothing salary. People today get more help with everything than any one got back in the 70s or 80s . WFH, paid childcare/free hours, UC when working minimum hours, COL payments etc etc

Exactly. x

Same here (£60,000 to buy). To buy a similar property today with the same deposit, I’d need to borrow £245,000! Not happening.

I’m actually OK - I’m older and I don’t have a large mortgage (moved out of the £60,000 property to a more expensive area which is why I have a mortgage at all) but if I were 15/20 years younger, I’d be screwed.

I live in a 2 bed flat in the Midlands valued at over £250,000. If you know where you can get a 2 bed in Zone 1 for that amount, I’d suggest snapping it up sharpish!

It’s not really fair to call people stupid and ill-informed for believing rates would remain relatively low when members of the Bank of England monetary policy committee were saying exactly that a few years ago. For example:

https://amp.theguardian.com/business/2018/aug/09/interest-rates-will-stay-low-for-20-years-bank-of-england-expert

WFH costs the worker more unless their commute fares are ridiculous, because they are running lights and heating, kettle etc all day.

Child care allowances became essential to allow women to work after kids. Many couples can't afford for the mother to stay at home.

UC is a handout to the employer, not the employee. If employers paid more, it wouldn't be needed. If employers hired full-timers instead of part-timers, UC wouldn't be needed. A Marxist analysis will tell you that state benefits for the unemployed and underemployed are there to maintain a reserve army of labour to be hired and fired at the employer's convenience.

You can't compare the 70s with its unionised workforces, full-time employment for most men, and low unemployment amongst men with an expectation that women could be SAHMs or work part-time for what my mum called "pin money" and the man would earn enough to keep the wife and two kids, against the current situation.

And house prices measured in single annual average salaries have soared in that time.

A high proportion of families coped on 1 salary back then though, due to cheaper houses and COL. They didn't need cheaper childcare etc.

It’s also deliberately exaggerated. I live in the NE and there’s nowhere selling 3 bedroom houses on large corner plots for £130k that I’d touch with a bargepole.

This was eight years back and the owners wanted a quick sale. I had no chain and jumped at it.

Also in NE, less than 10 minutes walk from a railway station. I think the train noises put some buyers off but I'm not bothered by them.

Good for the treasury workers! Darlo is lovely and it's really easy to reach from lovely places like Shildon. I recommend not living in Middlesbrough though, we call the residents "smoggies" for a reason...

Great visual! Hopefully all those of the “we had it so much harder” will pay attention to it. Somethings tells me they won’t though.

I love the north/south comments. I live in the north. It is NOT cheap where I live. Yes, not London prices, but a 4 bed detached house can easily set you back over £1m in some parts of my town.

When you WFH you spend less on clothing particularly shoes, food and travel. You can also claim a small amount of money back per week if your contract states you are remote.

So unless your house is very energy inefficient it equals out.

It's not just "the last few years" though is it?
The last time the interest rate hit 5% was 2008!
We've had 6 prime ministers, a global recession, a worldwide pandemic and brexit since then!
Its far enough that your average homebuyer of any age uo to their mid thirties would rely on their lived experience rather than what rates were like when they were a teenager, up toa decade before they even started saving for/thinking about buying a house.

It's not like mortgages aren't stres tested - but if even the banks only did the stress test to x% its a bit unfair to expect your average buyer to think they have to go over and above that!

Similar here, bought in 2008 and fixed mortgage for 5 years at 5.85%. Rates then plummeted. House worth a bit more now than when we bought it but probably only about 10% more

It's not even back to long time average rates. It will go up again...I imagine 5.5 or 6%.

I take my own lunch to work, have to because of food allergy. I also have to run a lot of IT equipment in my current job. So I don't make the huge savings that you would expect.

Oh really?

We almost bought a house in Middlesbrough last year.

I say almost with a sigh of relief - it wasn't my first choice of location. It was desperation to get out of an awful rental.