Mortgage Rate Rises

[jonneymendoza]

My parents house was worth nearly a million at the peak. My mum was a hair dresser and my step dad a middle manager at a factory. (final salary pension for him and same job his whole life too!)

My dad was a security guard and my mum a nurse.


They owned a 5 bedroom house in zone 3 London. 2mins walk from a well established London underground station as well... Whilst raising 3 kids...

Nevermind u and I. What hope do our children have at owning anything?

 

[413x]

My dad was a security guard and my mum a nurse.


They owned a 5 bedroom house in zone 3 London. 2mins walk from a well established London underground station as well... Whilst raising 3 kids...

Nevermind u and I. What hope do our children have at owning anything?

Ha yes. My parents house sits on over acre of land. They did nothing clever but buying a bigger house when they wanted to.
And my mum (biological) has 3 kids. And my step dad 4.

Here's me with none and glad because the stress and risk and cost would be majorly concerning now.
And each of my sisters with 1. Both would like more but my middle sister bought first house during covid and is not having an easy time with 1. She's not even got to the childcare costs part. Haven't and wouldn't dare ask. If she's in negative equity. But may well be

 

[fez]

Then sadly buying a house probably isn't right for them.
I could PCP an Aston Martin would it be harsh if I couldn't then afford the repayments on that?

That makes no sense. Its not like renting is cheaper than a mortgage. In a huge amount of cases you are simply paying someone elses mortgage along with a margin for maintenance/management fees.

People are desperate to buy a house because the alternative is so much worst for most people. Most people don't want to retire and find that instead of having low outgoings and an asset worth hundreds of thousands they instead have insane rent, no wealth and the threat of losing their home at any point.

 

[fez]

I would suspect an increasing number of people are going to be vulnerable and be in same position. They won't want that big house my parents have. So these typical boomer houses (500k-1mln).. There's too many to buy.
Especially out in the countryside.

We're trying to buy one of these types of home at the moment and I can assure you they are still insanely expensive. Perhaps in the next 20 years that will change but by that time we will be in our late 50s.

I assume this is the same everywhere popular but house prices for larger more expensive houses are just being propped up by investors and developers buying them and turning them into HMOs or flats.

My parents house was worth nearly a million at the peak. My mum was a hair dresser and my step dad a middle manager at a factory. (final salary pension for him and same job his whole life too!)

My dad was a security guard and my mum a nurse.

They owned a 5 bedroom house in zone 3 London. 2mins walk from a well established London underground station as well... Whilst raising 3 kids...

Nevermind u and I. What hope do our children have at owning anything?

Yep. The maths doesn't make sense. When a huge number of the countrys good family home housing stock is owned by people who wouldn't be able to afford a hovel if their careers were replayed in the current times something has fundamentally broken.

We're just about to take on a whacking great mortgage and i'm sure we will be fine but thats because we are fantastically privileged. If we weren't, I would be super scared. I'm still trying to impress upon my partner that things can happen and that going from a 110m2 house to a ~200m2 house isn't just the cost of the house/mortgage.

Council tax will go up by about £1500/year. Energy costs will probably rise by £1000/year. Mortgage will be over £3000/month if we borrow to our limit vs about £800 base at the moment.

My partner has a secure career however I don't. Her parents are wealthy and would no doubt bail us out if needs be but I don't like the idea of that. We have various assets we could throw at any issues but its still risky at the moment.

The next 20 years are going to see a massive sea change IMO. Whether thats for the better or not is very up for debate. You can't live for the negative what ifs though.

 

[matt100]

Most of the repossessions in the 80's/90's were down to higher interest rates that were going up monthly(way above what would have been reasonably expected), recession and no mortgage protection that people have today. The governments of the time realised this and put in the measures we have today to keep the housing market going. People who took out big mortgages on very low interest rates should have looked at the reality of what their payments would go up by and budgeted accordingly.

It was down to people borrowing too much Vs the potential interest rate moves of the time. It was exactly the same thing, people wanting to own a house getting caught out by circumstances.

The only difference is nowadays people from the time that houses were 3/4x salary and still couldn't keep the thing want no discussion about how people now have to spend 5/6/10+ x their salary to have the same opportunities.

It's not unreasonable to want some housing security and it's not practical to not live somewhere but for some mad reason there are still people in my generation and earlier who construct the daily mail strawman of "someone I know" who has a new Audi and a big TV.. that's why they can't afford a house.

Not at all because governments of all colours have failed miserably to build houses/replace the council houses Maggie flagged off or tackle NIMBYism to deflate prices.

Easier to sneer at people just struggling to buy a house.

Well, enjoy your retirement when there's nobody to look after you because nobody can afford to settle down and have kids.. because who wants to do that in a HMO?

It's like reverse envy.. super weird.

 

[413x]

We're trying to buy one of these types of home at the moment and I can assure you they are still insanely expensive. Perhaps in the next 20 years that will change but by that time we will be in our late 50s.

I assume this is the same everywhere popular but house prices for larger more expensive houses are just being propped up by investors and developers buying them and turning them into HMOs or flats.





Yep. The maths doesn't make sense. When a huge number of the countrys good family home housing stock is owned by people who wouldn't be able to afford a hovel if their careers were replayed in the current times something has fundamentally broken.

We're just about to take on a whacking great mortgage and i'm sure we will be fine but thats because we are fantastically privileged. If we weren't, I would be super scared. I'm still trying to impress upon my partner that things can happen and that going from a 110m2 house to a ~200m2 house isn't just the cost of the house/mortgage.

Council tax will go up by about £1500/year. Energy costs will probably rise by £1000/year. Mortgage will be over £3000/month if we borrow to our limit vs about £800 base at the moment.

My partner has a secure career however I don't. Her parents are wealthy and would no doubt bail us out if needs be but I don't like the idea of that. We have various assets we could throw at any issues but its still risky at the moment.

The next 20 years are going to see a massive sea change IMO. Whether thats for the better or not is very up for debate. You can't live for the negative what ifs though.

Our house is tiny for what people think when you say "3 bed detached".
Its a 3 bed (but 2.5 bed really) and none of the rooms are big.
Its only 78 sqm.
Edit. We have 190k of debt still. Started at 220.


I don't think we will ever have anything bigger with the threat of losing jobs/careers mid term.
Because, at best, losing jobs means a huge pay cut.

I've said we can't ever expand our debt. We took this debt on with salaries of 55k (combined) and now have salaries of 90k (combined).

But at any point this could drop to zero and only recover to 50k.

This is the reality we live in and it's probably going to be case for more and more people. I dare not take on a PCP car or any other loans.

As said, I'm fairly good with turbulence, and part of me actually wants to sell up and just leave the UK. Because I think it's dying. But many people have families and big debts and close ties etc. It's weird living in a reality where you only feel secure in 6 months chunks. And instability for many is extremely taxing mentally.

 

[aaronyuri]

We're trying to buy one of these types of home at the moment and I can assure you they are still insanely expensive. Perhaps in the next 20 years that will change but by that time we will be in our late 50s.

I assume this is the same everywhere popular but house prices for larger more expensive houses are just being propped up by investors and developers buying them and turning them into HMOs or flats.

This is still absolutely true - especially in Wales. Large countryside houses that were in the arse middle of nowhere were 200-300k pre-Covid. Some of these houses are now on the market for 600-800k and selling. The remote working fantasy hasn't died. Someone can flog their modest home in zone 1/2/3 and buy an estate in Pembrokeshire or Mumbles. It has been pricing out locals since the pandemic.

We are also going through a house move from 70m2 to 240m2 and we are trying to get it done because a house of this size in Cardiff could end up touching a mil in 5-10 years with the way things are going. Some of the modernised and extended houses in this class are already pushing near 800k. It's gone berserk. The people we're buying from bought the house for £202k in 2006!!

 

[jonneymendoza]

Our house is tiny for what people think when you say "3 bed detached".
Its a 3 bed (but 2.5 bed really) and none of the rooms are big.
Its only 78 sqm.
Edit. We have 190k of debt still. Started at 220.


I don't think we will ever have anything bigger with the threat of losing jobs/careers mid term.
Because, at best, losing jobs means a huge pay cut.

I've said we can't ever expand our debt. We took this debt on with salaries of 55k (combined) and now have salaries of 90k (combined).

But at any point this could drop to zero and only recover to 50k.

This is the reality we live in and it's probably going to be case for more and more people. I dare not take on a PCP car or any other loans.

As said, I'm fairly good with turbulence, and part of me actually wants to sell up and just leave the UK. Because I think it's dying. But many people have families and big debts and close ties etc. It's weird living in a reality where you only feel secure in 6 months chunks. And instability for many is extremely taxing mentally.

You really think UK are the only country struggling? Lol

AI for instance will affect every country...

Every major city in the world has a housing crisis. Some way worse than London...

 

[413x]

You really think UK are the only country struggling? Lol

AI for instance will affect every country...

Every major city in the world has a housing crisis. Some way worse than London...

If I was leaving I'd be selling up and moving to some east Asian cheap country.
I don't expect to be a able to escape to a western country.

Basically raising value of cash by moving somewhere cheap.

 

[jonneymendoza]

If I was leaving I'd be selling up and moving to some east Asian cheap country.
I don't expect to be a able to escape to a western country.

Basically raising value of cash by moving somewhere cheap.

My vote goes to Philippines or Vietnam

 

[413x]

My vote goes to Philippines or Vietnam

I'd take Indonesia too.
If it wasn't for my sick dog I think I'd be gone

 

[Bassmansam]

We bought the max we could at the time (5 years ago now)
Thankfully haven't ever borrowed more since then. And I was nervous at the time.
I'm not concerned now with house prices going down, rates going up etc as we now have enough equity and salary increases to cover anything except disaster.

What I am concerned about is job loss. My parter just went through redundancy and survived.
I lost my job in January.

Both our careers are AI vulnerable. So I don't feel I can ever increase my net debt again as I can't see safety in future.


I would suspect an increasing number of people are going to be vulnerable and be in same position. They won't want that big house my parents have. So these typical boomer houses (500k-1mln).. There's too many to buy.
Especially out in the countryside.

I work in Business intelligence and do worry about AI sometimes. But in its current state you still have to know what you are doing to use it, like i can't imagine anyone from Sales /Business Operations/Non tech people using it well.
I do pay for redundancy insurance which would cover 65% of my salary for 12 months, gives me peace of mind.

 

[matt100]

My vote goes to Philippines or Vietnam

I've been looking at this on and off.. it's really not as simple as you might think.. it's easy to romanticise it but for example my vote currently would be Vietnam, I spent 3 weeks there just before COVID and totally fell for the place.

However.. as far as I understand it you basically can't own land, you can own the building but not the land and I wouldn't call that a secure retirement.

So then we started thinking casually about either the 1 euro houses in italy or maybe some sort of farmhouse or something but I understand the beaurocracy is wild and potentially expensive and then most of the same people complaining about people buying avocados and netflix vs houses also decided to make moving to Europe much harder.

 

[robj20]

That makes no sense. Its not like renting is cheaper than a mortgage. In a huge amount of cases you are simply paying someone elses mortgage along with a margin for maintenance/management fees.

People are desperate to buy a house because the alternative is so much worst for most people. Most people don't want to retire and find that instead of having low outgoings and an asset worth hundreds of thousands they instead have insane rent, no wealth and the threat of losing their home at any point.

It seems to be the deposit is the sticking point for a lot of people not the repayments. Like you say very often renting costs more per month.

 

[fez]

It seems to be the deposit is the sticking point for a lot of people not the repayments. Like you say very often renting costs more per month.

Yeah, its the finding a 10% deposit on a house that, in many places in the UK will be setting you back £300k. Add in all the additional little costs to buying a house and you can easily end up having to save £25k for a very small actual deposit. All whilst paying someone elses mortgage and trying to live.

 

[tonys]

It was down to people borrowing too much Vs the potential interest rate moves of the time. It was exactly the same thing, people wanting to own a house getting caught out by circumstances.

The only difference is nowadays people from the time that houses were 3/4x salary and still couldn't keep the thing want no discussion about how people now have to spend 5/6/10+ x their salary to have the same opportunities.

It's not unreasonable to want some housing security and it's not practical to not live somewhere but for some mad reason there are still people in my generation and earlier who construct the daily mail strawman of "someone I know" who has a new Audi and a big TV.. that's why they can't afford a house.

Not at all because governments of all colours have failed miserably to build houses/replace the council houses Maggie flagged off or tackle NIMBYism to deflate prices.

Easier to sneer at people just struggling to buy a house.

Well, enjoy your retirement when there's nobody to look after you because nobody can afford to settle down and have kids.. because who wants to do that in a HMO?

It's like reverse envy.. super weird.

Were you actually around during the 80's recession, did you have to go through any of the problems that we had to contend with?
You go on about the amount that people pay now but when my wife's parents bought their house it was cheaper than when we bought ours and when our children brought their houses they weren't as cheap as ours and when my grandkids go to buy a house it will be even more expensive, this is just the market that it happens in, things go up.
I'm definitely not sneering at anyone struggling to buy a house but almost everyone buying a house has the same problems of cost versus wages.

 

[matt100]

Were you actually around during the 80's recession, did you have to go through any of the problems that we had to contend with?
You go on about the amount that people pay now but when my wife's parents bought their house it was cheaper than when we bought ours and when our children brought their houses they weren't as cheap as ours and when my grandkids go to buy a house it will be even more expensive, this is just the market that it happens in, things go up.
I'm definitely not sneering at anyone struggling to buy a house but almost everyone buying a house has the same problems of cost versus wages.

Yes I was.

It was harder to get a loan which I guess held the prices down. I was also there when it got easier and prices rocketed.

I bought my first flat when I worked full time in a shop. It was about 4x my income.

Now the same thing would be probably 15x the comparable income.

I've listening to you go on about interest rates being higher before choosing to ignore that a higher rate on a substantially lower sum equals less money.

You're just wrong, it is substantially, seriously, massively harder to buy a house now and for any normal income kid somewhere in the south without the bank of mum and dad/inheritance etc it's essentially impossible.

It's got absolutely nothing to do with audis or holidays.

 

[Hagar]

I moved up north in 1974 which was a good thing (Hants to Lancs).

 

[tonys]

Yes I was.

It was harder to get a loan which I guess held the prices down. I was also there when it got easier and prices rocketed.

I bought my first flat when I worked full time in a shop. It was about 4x my income.

Now the same thing would be probably 15x the comparable income.

I've listening to you go on about interest rates being higher before choosing to ignore that a higher rate on a substantially lower sum equals less money.

You're just wrong, it is substantially, seriously, massively harder to buy a house now and for any normal income kid somewhere in the south without the bank of mum and dad/inheritance etc it's essentially impossible.

It's got absolutely nothing to do with audis or holidays.

At the time it was hard to get the money to pay the mortgage aswell as the food and utilities. Today there is more done to stop people having their houses repossessed and the mortgages have changed to reflect the higher prices.. We had no help what so ever, it was pay your mortgage first, most of the repossessions were probably down to unemployment rather than actually maxing out on the mortgage.
It will be always harder for the next generations if prices go up, it's a fact of life but many refuse to see that and blame the previous generations even when they had very little control on the situation.

 

[matt100]

At the time it was hard to get the money to pay the mortgage aswell as the food and utilities. Today there is more done to stop people having their houses repossessed and the mortgages have changed to reflect the higher prices.. We had no help what so ever, it was pay your mortgage first, most of the repossessions were probably down to unemployment rather than actually maxing out on the mortgage.
It will be always harder for the next generations if prices go up, it's a fact of life but many refuse to see that and blame the previous generations even when they had very little control on the situation.

See?

It was worse for me blah blah.. no it wasn't, you lived in the conditions of the time.