Mortgage Rate Rises

neocon said:
Sky news reporting IR could be over 4% until 2029

I definitely would not be buying a house right now
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huge conflicting information as sky news are also reporting that we are going to be in for a recession. if that happens then this recession will be much worse than the one in 2008.

It will be interesting what measures they will do to help get out of a recession, as normally interest rates crash to encourage spending, but seeing how incompetent the bank of England and the government are it can be a total blood bath. I am still absolutely amazed why they haven't increased taxes instead of raising interest rates unless they were egging on for a recession from the start of it all. (which they have hinted a few times on)
 
Mines due up in January, but ive been massivly overpaying so Im down to 75k with another 10k in a pot to pay off.

A jump in interest stings but Im glad I dont have 6 figures still to pay, I want this gone by the time I hit 45 (6 years)
 
FishThrower said:
huge conflicting information as sky news are also reporting that we are going to be in for a recession. if that happens then this recession will be much worse than the one in 2008.

It will be interesting what measures they will do to help get out of a recession, as normally interest rates crash to encourage spending, but seeing how incompetent the bank of England and the government are it can be a total blood bath. I am still absolutely amazed why they haven't increased taxes instead of raising interest rates unless they were egging on for a recession from the start of it all. (which they have hinted a few times on)
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Both the chancellor and the BoE have said on record a recession is necessary.
 
BUDFORCE said:
I don't work in this area, but one of the girls said she had someone on the phone coming off their fixed rate and going from something like £3k per month to £13k per month.

I think it was a £1.6m loan but lol.
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3k a mo at 2.3% is 680k outstanding (source: me) over 23 yrs

No way anyone is servicing a 1.6m loan at 3k /mo.
 
We're in the fun phase of just getting our mortgage sorted right now for the house we're buying. 4.64% is the best rate we've been able to get so cracking on with that.
 
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t2na said:
We're in the fun phase of just getting our mortgage sorted right now for the house we're buying. 4.64% is the best rate we've been able to get so cracking on with that.
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After some of the figures I've been looking at 4.64 seems decent. Imagine saying that 2 years ago.
 
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Hutchy said:
After some of the figures I've been looking at 4.64 seems decent. Imagine saying that 2 years ago.
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Yeah, that's the mad thing currently. We're being told that 4.64 is pretty good, all things considered.

I guess the only 'good' thing is that we're buying a house for almost 100k less than it was originally listed for - which says a lot about what the initial inflated asking price was...
 
GordyR said:
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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As reported in the Times “The uptick in house prices in October most likely reflects the fact that the supply of properties on the market is constrained. There is little sign of forced selling, which would exert downward pressure on prices, as labour market conditions are solid and mortgage arrears are at historically low levels.”
 
t2na said:
Yeah, that's the mad thing currently. We're being told that 4.64 is pretty good, all things considered.

I guess the only 'good' thing is that we're buying a house for almost 100k less than it was originally listed for - which says a lot about what the initial inflated asking price was...
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4.64% is pretty decent and better than you would have been getting a few months back, right now I think anything under 5 is pretty good going. I'll be pretty happy (all things considered) if our rate is around 4 when we next renew it is much easier to suck up than the 6% plus we were looking at!
 
I'd be happy in 2027 if rates are 3.5-4pc at this rate

However I'd also be happy if the rates were still 5 but prices had come down as I want to move before then
 
neocon said:
The rates or house prices?

There's a huge lag between rate changes and it feeding through and there's no way everything has fed through yet.
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Ye interest rates.

5pc is not an issue in itself, its the fact its gone from basically nothing to 5pc in such a short space of time is the problem.
 
a1ex2001 said:
4.64% is pretty decent and better than you would have been getting a few months back, right now I think anything under 5 is pretty good going. I'll be pretty happy (all things considered) if our rate is around 4 when we next renew it is much easier to suck up than the 6% plus we were looking at!
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Yeah, you're right - I think I'm still taking into account the 2.6% we had back in 2017 when we bought our first house.

It's a different situation now and even with 4.64% we're able to manage the repayments well within budget.
 
BUDFORCE said:
It doesnt matter so much when it stabilises.

Its just the sharp increase which is screwing everything up.
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yes and no, nurses, teachers pubic sectors workers wont ever see the salary increase to match it, where as the corp world will in most cases catch up with year on year increases
 
delta0 said:
As reported in the Times “The uptick in house prices in October most likely reflects the fact that the supply of properties on the market is constrained.
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And I simply do not think that's true whatsoever. None of the available data I've seen points to that being a reasonable conclusion unless you're talking only about very specific areas of the country or segments of the market.

Spokespeople for lenders, brokers and agents, always say the same things during market corrections. If I were a cynic I would say that they perpetuate this narrative very deliberately, but in truth I just think that with anything remotely economics related, very few journalists are equipped to understand the data they're looking at, let alone interpret and report on it accurately.

An increase in the number of transactions at the higher end of the market will result in an increase in the average selling price for that month, even if house prices are falling across the board.
 
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The reality is what's probably best for the country is just some stability. So a decade of 3-4% interest rates and similar low single digit house price rises, making homes, homes again and not expecting them to be money printers.
 
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