yep, rates are just starting to stabilise and in some cases drop and house prices in Surrey have been pretty stable - I suspect we have reached the end of any major changes around greater London. Early spring next year people are anticipating a decent surge in activity
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
If you look at the breakdown it suggests that the National average is being dragged upwards by an influx of larger, more expensive houses hitting the market; which to me suggests that a bit of a national downsizing is underway, caused by those who can no longer afford their 4-5-6 bed homes that were purchased with ultra low interest debt, suddenly becoming unaffordable.
If that’s true then it’s very easy to be misled by headline numbers and talk of averages.
Demand seems to be pretty strong in the 3 bed and under market, which I think adds some credence to this interpretation.
But anyway, honestly, if I were a betting man I would say that the largest price drops are still yet to come, as we’ve not yet seen a real capitulation moment, and there’s still so much lag in current data.
My money’s still on late 24 to early 25 being the bottom; for now at least anyway.
If that’s true then it’s very easy to be misled by headline numbers and talk of averages.
Demand seems to be pretty strong in the 3 bed and under market, which I think adds some credence to this interpretation.
But anyway, honestly, if I were a betting man I would say that the largest price drops are still yet to come, as we’ve not yet seen a real capitulation moment, and there’s still so much lag in current data.
My money’s still on late 24 to early 25 being the bottom; for now at least anyway.
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I agree with what you have said. But one thing we have not experienced yet is a full on job recession, if that happens then that will massively echo into the house market.
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Soldato
- Joined
- 12 Feb 2006
- Posts
- 17,721
- Location
- Surrey
Hsbc
2 year fix @ 5.54%
Monthly payment £1,541.20
£250k loan amount, with approx 21 years left (i've locked myself out of one of my banks which shows our current mortgage details)
house worth about £550k.
Seeing news like this I'm just like surely ours has gone down a little tiny bit.
Mortgage News: Yorkshire Latest In Raft Of Lenders To Cut Fixed Rate Costs
Find out what's happening with today's mortgage rates and calculate monthly repayments across a range of different rates and deals. 22 August: Small
www.forbes.com
the sad thing is, we've now had this mortgage exactly 5 years, and with many overpayments, hitting almost the max 1 year, we're now going to renew at what we used to pay 5 years ago.
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Thats what spokespeople for lenders always “suggest”, even when the data doesn’t; and even more so during times of woeful mortgage approvals and market downturns.
From what I can see, supply in terms of actual listings is the highest it’s been since 2018, and when sales volume drops like a stone, which it absolutely has, averages get even more easily skewed by higher valued properties hitting the market, making these indexes extremely unreliable and misleading when viewed in isolation and without proper analysis, particularly on such a short term, month-on-month basis.
I think it’s also worth remembering that Nationwide’s index only covers something like 12% of the mortgage market as a whole, which in turn only covers around 68% of the entire housing market
Don’t get me wrong, when combined with the data from the other lenders, their index is definitely more useful in my opinion than the grossly misleading Rightmove and Zoopla indexes, but I would still take what their spokespeople say on the back of such tiny monthly movements with a large pinch of salt.
Hopefully I’m wrong, and if the data changes and forms a strong trend I’ll change my mind along with it, but for now I think it’s more likely than not, that there will be a fair bit more pain to come before this correction is over.
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Regardless of whether the number of properties are up or down over a time period if there’s too few then that still drives up prices. Basically demand is still greater than supply. Demand will always be significant as most properties aren’t owned with a mortgage so also won’t appear in those bank stats.
The best 2 year fixed I'm seeing with those details os 5.09% with Virgin money: https://www.moneysavingexpert.com/m...oductNoFee=false&noEarlyRepaymentCharge=falseHsbc
2 year fix @ 5.54%
Monthly payment £1,541.20
£250k loan amount, with approx 21 years left (i've locked myself out of one of my banks which shows our current mortgage details)
house worth about £550k.
Seeing news like this I'm just like surely ours has gone down a little tiny bit.
Mortgage News: Yorkshire Latest In Raft Of Lenders To Cut Fixed Rate Costs
Find out what's happening with today's mortgage rates and calculate monthly repayments across a range of different rates and deals. 22 August: Small
the sad thing is, we've now had this mortgage exactly 5 years, and with many overpayments, hitting almost the max 1 year, we're now going to renew at what we used to pay 5 years ago.
What data are you looking at that suggests that there's a significant supply shortage right now? And in what particular part of the market?
Everything reliable that I've been able to lay my hands on suggests that demand has dropped off a cliff for larger houses, just as supply has increased; particularly around London, East Anglia and the South-East.
The only area where demand appears to continue to be strong, is for smaller properties. All of which ties neatly in with the transaction price decreases we've seen in that part of the market over the last 12 months, and the idea that people are downsizing due to a lack of affordability.
Prices were only able to reach the heights they did at their peak back in October 2022 due to the prevalence of extremely cheap debt over the last ten years, with prices rising over time to reflect the resulting increase in affordability due to people being able to borrow many more multiples of their household income than they were able to previously. If higher interest rates are here to stay and government intervention in the form of H2B type schemes is at an end, then the market will gradually correct towards it's new equilibrium. Some of that correction is already behind us, but historically these things always take a good 2-3 years unfold fully, and short of a sudden and dramatic U-turn from the BoE, I can't see any good reason to think that things will be any different this time.
The best we can do is try to make educated guesses based on the data we have available; and there's still an awful lot of hopium in the market, which usually means that there's quite a bit more downside to come.
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Very similar boat to you. We've paid our mortgage down from £275k ish to under £200k but when we go to remortgage in 2 months we will be paying more than when we started. Plan is to try and aggressively pay it down over the next 10 years to try and be mortgage free and avoid the worst of the interest rates.
We were planning to move into our forever home in the next year or two but thats gone out of the window. Having a tentative look at converting the loft and doing some work around the house to make it nicer if we are going to be here for a while. Trouble is, costs for this sort of work have gone through the roof as well (no pun intended).
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Soldato
- Joined
- 21 Jan 2010
- Posts
- 3,882
Agree with all of that.
We'll see more pressure as people come off fixed rates and see big increases on their repayments. We're only a year or so into that.
People who fixed a few years back will see an increase that, I'd guess, will make them wait a few years before any move up the ladder. They will sit tight until things improve, whatever that means.
That will (and it's a guess) reduce demand for higher valued properties in particular.
Cheaper houses will always have a bigger pool of potential buyers, so I suspect they will hold up better. Again, that's gut feeling, not data.
The Bank of England has held the base interest rate at 5.25%
Six members of the Monetary Policy Committee - which makes the decision - voted to keep the rate the same; the other three wanted an increase
What was you expecting?
Like you say it's only just hitting now. Probably majority are still shielded.
2024 is where it probably swings and less people are on the good legacy deals and more get onto market rates.
I’d be concerned if they all agreed.
Economics has a lot of nuance behind it and the current economic state is very much on a knife edge.
You don’t want the people tasked with setting interest rates suffering from group think or bowing to public pressure
.
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The housing market is way worse than I’ve seen it in 35 years of ownership, the last proper crash in 1990 was nothing compared to this.
Yes prices are stable, but at way above market value.
Reading what Bailey said, he seems worried that inflation might go up and has no inclination to lower rates.
This could end up being a bloodbath. It just depends how long people can hold on.
Yes prices are stable, but at way above market value.
Reading what Bailey said, he seems worried that inflation might go up and has no inclination to lower rates.
This could end up being a bloodbath. It just depends how long people can hold on.
