Mortgage Rate Rises

[Jono8]

My view is that trying to actually time the market is a mugs game. By the time we know that the bottom is in, we'll have missed it; because you need to have been viewing at least 6-9 months earlier.

If you need to move, then move; whatever the market conditions. Just do as much research as you can and let the data inform whatever offers you're making.

In the current market, that means ensuring that you don't overpay. There's still an awful lot of over-optimistic sellers out there who haven't accepted that things are very different to 12 months ago. As such, there's a lot of very overpriced properties on the market that realistically should be asking at least 15% less than they are if they want to attract any kind of interest whatsoever.

If you have the means to pay asking on a property you're interested in right now, it could be very easy to make a mistake. But then again, if you're in it for the long term and you can comfortably afford the property you're looking at, then it doesn't really matter all that much, you'll be fine riding out whatever the next 12-18 months have in store.

On another note, I really don't like the term crash. It implys that during a correction we should expect to wake up one day to see large percentages suddenly wiped off of house prices, but that's not how it works; they decline gradually over 2-3 years and it's never in a straight line.

This. i think some people expect to wake up one morning and gleefully find that houses are worth half what they were the day before.

Prices absolutely have dropped maybe as much as 10% since the peaks of last year, and most likely will fall a bit more/stagnate for a while.

As you say, there are a lot of people who haven't got the memo and still expect there to be loads of buyers fighting over their property that they have listed at last years lol-prices. However, if they were sensible they could still sell for a decent price. People still need homes, and banks are still lending so..

Regardless a house price crash only really benefits you if you are a first time buyer in most instances.

If you are already an owner and want to move and you have a decent amount of equity it will like all stay fairly relative anyway.

 

[Sythe79]

This is a really nice way of looking at it - and I know there are lots of different views on it but it's definitely a nice way to consider it.

I've come to realise owning your own home is also probably the single best pension plan you can have too. I've said before my other half works in housing, and you look at the figures rising of 30-50 year olds that don't own a home and renting, wonder how the hell we as a country are going to afford to house them all as they start to retire in the next 20 years.

 

[unwashed potato!]

I've come to realise owning your own home is also probably the single best pension plan you can have too. I've said before my other half works in housing, and you look at the figures rising of 30-50 year olds that don't own a home and renting, wonder how the hell we as a country are going to afford to house them all as they start to retire in the next 20 years.

i'm not expert on this, but what do you mean, best pension plan?

i have a relative that's currently in care, the house is being used to pay for the care, but once it goes, then the state pays (from what I understand), so having a house one way or another, would have been the same result for their current care.

the only benefit i can see is that you don't have rent to pay out of your pension. curious to know what benefits i'm not seeing in terms of "single best pension plan"

 

[Sythe79]

i'm not expert on this, but what do you mean, best pension plan?

i have a relative that's currently in care, the house is being used to pay for the care, but once it goes, then the state pays (from what I understand), so having a house one way or another, would have been the same result for their current care.

the only benefit i can see is that you don't have rent to pay out of your pension. curious to know what benefits i'm not seeing in terms of "single best pension plan"

It gives you options that I feel a lot of people are just not going to have in the next 20 years, like even being able to retire in the first place and not being forced to work till you drop. It's not just the working poor and the dossers, you look at more middle class people that don't own a home and the projections on rent pricing and pension payouts, and it doesn't look good.

you might have a decent job and be able to afford £1000-2000 rent while working, can you afford that on your pension projection ?

 

[thebandit]

i'm not expert on this, but what do you mean, best pension plan?

i have a relative that's currently in care, the house is being used to pay for the care, but once it goes, then the state pays (from what I understand), so having a house one way or another, would have been the same result for their current care.

the only benefit i can see is that you don't have rent to pay out of your pension. curious to know what benefits i'm not seeing in terms of "single best pension plan"

In the interim between retiring and needing paid care the the equity in your home is the biggest investment /asset most poeple have. Cerainly if getting to retirement age having rented your whole life and still needing to rent in retirment or buying a home through your life and owning it outright in retiremnt are the two options most would choose the latter. Housing is a safe and historiacally very lucrative investment, long term it only goes up, havng that asset gives you many options, downsizing, equity relase etc.

Being in care you are expected to pay until you resonably cannot, this isnt just your home, its you savings too, are you advocating not saving money for your retirement also ?

I had a relative in care on my wifes side of the family, luckily she took advice and put her house into a trust, which her daughters managed. The trust meant the house was ring fenced off from carehome fees, but unfortunately her savings were not. The care home fees quickly ate through the entire saving pot so I understand what you are saying, its just a small part of a much bigger picture.

 

[Ali195]

In the interim between retiring and needing paid care the the equity in your home is the biggest investment /asset most poeple have. Cerainly if getting to retirement age having rented your whole life and still needing to rent in retirment or buying a home through your life and owning it outright in retiremnt are the two options most would choose the latter. Housing is a safe and historiacally very lucrative investment, long term it only goes up, havng that asset gives you many options, downsizing, equity relase etc.

Being in care you are expected to pay until you resonably cannot, this isnt just your home, its you savings too, are you advocating not saving money for your retirement also ?

I had a relative in care on my wifes side of the family, luckily she took advice and put her house into a trust, which her daughters managed. The trust meant the house was ring fenced off from carehome fees, but unfortunately her savings were not. The care home fees quickly ate through the entire saving pot so I understand what you are saying, its just a small part of a much bigger picture.

Haven't the Gov started closing these loop holes? Otherwise everyone approaching old age would just put the house in a trust and let the Gov pay once savings run out. What happens when savings run out? You get kicked out of a nice place and put in a dig?

Edit, my Dad tried this with the house when he died in Dec and the solicitor basically said it was a waste of time, took months to unwind it all, close the trust.

 

[neocon]

Haven't the Gov started closing these loop holes? Otherwise everyone approaching old age would just put the house in a trust and let the Gov pay once savings run out. What happens when savings run out? You get kicked out of a nice place and put in a dig?

Edit, my Dad tried this with the house when he died in Dec and the solicitor basically said it was a waste of time, took months to unwind it all, close the trust.

I think something changed recently because we had to do additional paperwork before a deadline. Some sort of register if I remember.

 

[413x]

I plan to unlock the most I can in one of those equity release "you get to live in your house but when you die the lender gets paid." things.

Hopefully that'll be 150k in today's money. As house is worth 300.

Not sure how it works exactly. But with no kids (hence inheritance is not a thing to think about) it's no brainer

 

[EvilRob]

I plan to unlock the most I can in one of those equity release "you get to live in your house but when you die the lender gets paid." things.

Hopefully that'll be 150k in today's money. As house is worth 300.

Not sure how it works exactly. But with no kids (hence inheritance is not a thing to think about) it's no brainer

Don't you want a safety net?

 

[413x]

Don't you want a safety net?

A safety net?

 

[b0rn2sk8]

Don't you want a safety net?

They are for old people to unlock their cash, it’s basically an interest only mortgage that doesn’t come due until you die.

When you die, they take what is due from your estate, what’s due should be less than the houses value if they did their calculations right. What Evers left goes to whom you left it to.

 

[Uther]

They are for old people to unlock their cash, it’s basically an interest only mortgage that doesn’t come due until you die.

When you die, they take what is due from your estate, what’s due should be less than the houses value if they did their calculations right. What Evers left goes to whom you left it to.

If there's no dependents, live it up, leave what's left to a dogs home or something. Makes perfect sense, you can't take it with you...
That's if you don't end up in a care home of course...

 

[b0rn2sk8]

If there's no dependents, live it up, leave what's left to a dogs home or something. Makes perfect sense, you can't take it with you...
That's if you don't end up in a care home of course...

Exactly, but the idea is to get rid of it before a care home is a reasonable prospect

 

[Foghorn Leghorn]

Exactly, but the idea is to get rid of it before a care home is a reasonable prospect

That's it, the name of the game is to snuff it owing as much money as you possibly can

 

[Freakbro]

That's it, the name of the game is to snuff it owing as much money as you possibly can

The saying is probably a little out of date due to inflation, but it goes "if you owe the bank a thousand pounds it's your problem, if you owe them a million pounds it's theirs"

 

[potatolord]

That's it, the name of the game is to snuff it owing as much money as you possibly can

Like the wizards in discworld. You could tell when they were about to die as they took out a lot of loans.

 

[413x]

That's it, the name of the game is to snuff it owing as much money as you possibly can

Yeah it's difficult when you aren't having kids.
I will probably leave a lot to charity/partner.
If I have a partner.. And depending on who goes first. Grim!

RNLI for sure is getting some. Even if I don't use them, going sea kayaking it's great to know they are there.

 

[Foghorn Leghorn]

Yeah it's difficult when you aren't having kids.
I will probably leave a lot to charity/partner.
If I have a partner.. And depending on who goes first. Grim!

RNLI for sure is getting some. Even if I don't use them, going sea kayaking it's great to know they are there.

RNLI is certainly a good shout, I'll be leaving something to the Wales air ambulance, thankfully not needed it myself but I've had a couple of mates air lifted from the circuit in Anglesey.

 

[413x]

RNLI is certainly a good shout, I'll be leaving something to the Wales air ambulance, thankfully not needed it myself but I've had a couple of mates air lifted from the circuit in Anglesey.

Ah yes. Another great cause! Like RNLI one of those that means can do more outdoors stuff just knowing the help would be there.

Didn't know that was a charity funded thing!

 

[HangTime]

My view is that trying to actually time the market is a mugs game. By the time we know that the bottom is in, we'll have missed it; because you need to have been viewing at least 6-9 months earlier.

I agree there's an inertia/lag factor. We bought our house in a falling market (15 years ago), if we'd waited we might have paid less, but wait too long and we'd potentially have paid more. More generally we were very keen to move for quality of life reasons which outweighed the potential financial benefit of staying put for longer in our old home. I do think there is a distinction between timing the house price market and timing the mortgage market however. I think the latter is something you can be a bit more savvy about in terms of locking in quotes and getting the ball rolling before expected rises, switching to the right type of products and such.