6% mortgage rates; trouble a'ht Mill

[Twiglets1]

This is a new 6% mortgage rates thread as the last one is almost full.

Thanks to KievLoverTwo for suggesting the second part of the title to reflect all the squabbling these threads are causing. Which could be a thing of the past of course. But realistically, it won't be.

Completely agree with all that

And I completely understand how angry because i was not able to buy until I was 35 and the frustration at watching prices rise and rise and the fear of never owning a house was horrible

And I truly believe absolutely everyone should have the right to a secure and affordable roof over their head . I've not got a problem with prices falling anyway. Cos if my house was worth less as it would mean other houses would be comparatively less too so would not be a problem if I wanted to move house etc

But certain people wishing financial devastation and potential homelessness on homeowners is just nasty

Sorry to hear that the over the top doomsayers have affected your mental health @janicegarvey Im sure there are lots of other people who feel the same way. Not many people will speak out about it on this forum any more though due to the house price crash crew who are only here to mock and spread fear not to help anyone.

I agree some people seem to take a perverse pleasure in the idea of homeowners struggling but that’s on them. Like you say, it’s not a bad thing that you have overpaid your mortgage. It’s just a shame you & others had to put up with people speculating like it was a game about will mortgage rates go sky high, will house prices crash 35% without any real basis in reality.

There’s a website called House Price Crash (HPC) whose members routinely quote and mock Mumsnet posts expressing our very genuine fears. Certain members of the HPC crew “walk amongst us” (their words). Disgusting lack of empathy really but as I said before, that’s on them.

Oh I've heard about house price crash forum

I'd imagine it's mostly populated by sad little bitter men typing from their bedsits or mum's spare bedroom.

As I said I sympathise with anyone who can't buy a house and the anger and worry they must feel. But just no need to wish bad on other people..it isn't a race to the bottom

Yup I have sympathy too for anyone who wants to buy but can’t. And I accept that affordability factors make it harder for people now than when I was young and buying my first property despite interest rates being higher then.

Wishing a catastrophe on other people isn’t a great response, however.

The speculation was nasty and affected many sales and made the stock of houses coming to the market much worse. We decided to wait to sell. Spring will hopefully bring good news for buyers needing mortgages and sellers alike.

I'm sorry but that's factually incorrect. The volume of new listings this year is almost exactly the same as it has been for the last 5 years. And there hasn't been much change in the mix of properties - old, new, large, small, done-up, doer-upper.

"It is massively unrealistic that homeowners will be in negative equity and forcasts of future doom and gloom are nothing more than forcasts no one has a reliable crystal ball. I would take them with a big pinch of salt"

Impacts will vary regionally. For example, if you looked at Sunderland you will see examples of people losing over 50% on a recent purchase, and also people who bought 20 years ago not seeing any increase in the value of their property.

Yes property usually increases in price but you may need to wait over 20 years if you pay too much and/or economic circumstances turn against you. Like many here I have bought and sold through the last 2 major house price corrections. Only pay what you can afford, pay that mortgage off as aggressively as comfortable, and rightsize as quickly as possible.

I've found data on the volume of residential property transactions which I have linked - this shows that 2023 is a quiet year for transactions, no surprise there I guess. But I couldn't see any evidence for the volume of new listings. Do you have a source you can show us?

https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above/uk-monthly-property-transactions-commentary

@Twiglets1 I'd read some hints about this but I am glad to see someone actually calling it out so clearly. There's one poster in particular I'm thinking about, it's literally impossible to post on Property/DIY thread for advice about difficult situations without this person getting a kick out of it.

Good points, shipping being attacked/re-routed is definitely inflationary while a recession certainly isnt good for a house price bubble, but if global inflation persists or increases they wont have much room to cut rates in the UK. I think those without mortgage debt are better off avoiding it for a while, and I don`t think another SD holiday would work like the last time, that was an economically naive mania for sure, massively overpaying for property to get a few thousand off SD, LOL, totally ridiculous.

Time linked. Slides downloadable although he asks that you don't share on social media.

He uses data from 20 Estate agents?

Er, No. TwentyEA is the platform he extracts the data from

"TwentyEA has over 15 years of experience providing data to Estate Agents and other residential property market professionals and holds the UK’s biggest and richest resource of factual life event data including the largest, most comprehensive source of home mover data compiled from more than 29 billion qualified data points.
Our tools and services are based on factual whole-of-market coverage of 99.6% of all UK property listings, as well as our DOMUS database - the most comprehensive property data resource available in the UK, with over 330 attributes available for over 32 million properties.
TwentyEA is part of the TwentyCi group of companies that use data science to improve commercial outcomes for clients."

Ok thanks for clarifying. I’ll take a proper look at it later.

Good, but I'm surprised you left it so late. Kiev and I have been quoting 'facts' from this channel most of the year.

I'll warn you that he speaks with an EA "accent". I also caution about using the average house prices quoted. They are pure arithmetic means and virtually meaningless UK-wide. I have advised him of that.

I've had a look at this now @XVGN and found it very interesting, think I will tune into the next one too. Found it surprising that the volume of new listings in 2023 does indeed seem comparable to previous years.

I'll be a data geek in no time at this rate! Only got slightly distracted by the furniture in the background at Chris's house, nice dresser.

Barclays said on Friday it expects the Bank of England (BoE) to start its interest-rate cut of 25 basis points in May, compared to its previous expectation of August 2024.

Britain's economy might be in a recession according to data that showed it shrank between July and September, shortly after finance minister Jeremy Hunt took the rare step of suggesting the BoE might cut interest rates to boost growth.

https://www.reuters.com/world/uk/barclays-expects-boe-deliver-rate-cut-may-2024-2023-12-22/

Im sorry if this is a stupid question but what does it mean to be in a recession?

I'm in my 40s and don't even really know 😳😳😳

I had to google it myself as not too sure what it really means either and I'm in my 50s 😂

It seems we're not in a recession yet but may or may not enter one in February.

https://www.bbc.co.uk/news/business-52986863

I agree with you about most of this:
A recession/ coming deflationary wave is not good for anyone wanting to maintain HP at high levels.
I would agree with you that high levels of mortgage debt (and other debt) are risky at present.
I don't think another SD holiday would assist the Tories as it would be mainly unpopular with the electorate. They may come up with some other scheme, as has been mentioned before.

The bits we may disagree on to an extent:
I think we will have a recession as I've said for some time (probably in an official one now), followed by a reduction in base rates, although v unlikely to be back to zero, plus lots of QE. This will lead to a second round of inflation (and equity/ asset inflation short term) with disastrous consequences. I definitely don't buy this soft landing, rates will reduce and HPs with start to rise again narrative.

I'm not saying this because I want to see people with mortgage debt struggling but because I think it is true. People can call it 'doom mongering' if it makes them feel better. There are regular accusations of 'HPC forum' by some of those who disagree, in an attempt to deflect from opinions that they don't like reading. It's pretty nasty but I guess it's the only way they can cope psychologically. There are others who disagree but are consistently polite and respectful.

@CrashyTime has made it clear that he/she is a member of the forum but I haven't seen any other poster who is. There are posters such as @XVGN and @KievLoverTwo who look at data, other than what is in the MSM which is a very good thing, imo, not doom mongering.

It's negative growth for two quarters.

The growth of the economy is measured through things like the volume of retail sales and when that falls rather than grows, as @rainingsnoring says over 6 months the economy is classed as contracting rather than growing. How deep a recession refers to the amount the figures go down.

To be quite honest I’m not exactly sure myself and I’m in my 50s 😂

It’s about the economy shrinking over 2 consecutive quarters but what does that mean for normal people just living their lives. I don’t properly understand it 🤷🏼‍♀️

The GDP figures include retail sales but many other things in addition, including prostitution and drugs as well as the imputed rents estimate. GDP is all financial transactions so, for example, destroying a country's infrastructure and then rebuilding it increases the GDP figure considerably two ways. Looking at you, USA. Clearly, it is of no merit and destroys the lives of many in return for some improvements for a very small minority eg defence industry.
Just making the point that GDP is a poor measure of prosperity, never mind prosperity per citizen. It is the measure that is used to define a recession/ depression/ growth though.

The theory is that growth in GDP (a poor measure, as I have suggested above), is a positive thing for the whole population.
As I have touched on above, this is certainly not always the case. There are various other ways in which this is not always the case eg the (anaemic) growth in the last, nearly 20 years, has been beneficial to the already wealthy rather than to the majority.
On the other hand, recession is generally considered negative and certainly results in restructuring of business, rising unemployment, etc which will have more obvious negative effects for a large number of people.