It wont collapse, demand will fall away which naturally pulls inflation with it, life will be hard for certain people for a while. The housing market may well finally correct itself but the sky wont fall in.
Energy Prices (Strictly NO referrals!)
- Thread starter DXP55
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It wont collapse, demand will fall away which naturally pulls inflation with it, life will be hard for certain people for a while. The housing market may well finally correct itself but the sky wont fall in.
I guess. Can see 5-6% doing it for some people and we are not that far off that already. New mortgages already about 4% and BOE projected to increase base rate up another 0.5% to 2.25% next month.
Ah it's only 5%
There's going to be a lot of people in negative equity that bought just after the pandemic. That's fine if they ride it out in the long term.
Soldato
There was a report from the BoE that said 9% was tolerable. If I find it I’ll post it. Worth also considering that homeowners are usually much further up the earning and saving bands then non home owners. They are more able to withstand financial pressures.
Soldato
Inflation up again, it's going to get tighter and tighter for people.
But will it?
Prices for energy in particular aren't due to putin.
If energy is getting more and more expensive it's a direct removal of cash from our economy.
More and more people spending less.
And in the UK we have so many accumulating failures. Failures that need more money.
NHS, infrastructure, welfare, pensions etc.
If tax revenues dwindle that cash will either dry up and UK will just rot away or you'll have to tax a population where more and more are struggling.
Even if the war ended tomorrow it might significantly reduce our problems. But we were heading this way anyway. And we have climate change coming. Can't be long before the west starts to be affected by that significantly
Soldato
I don't think I mentioned mansions.
9pc?
That might be tolerable before this inflation spike. But not now. Especially with energy like it is
Not since coming out of the pandemic they haven't, during they didn't have a lot of choice but to! Hence why the public saved somewhat over half a trillion (iirc, or billion?) pounds during Covid and started to splurge it once out, which is what predicated the massive rise in demand against lack of supply starting this inflation cycle off.
Suspended
Apologies you didnt, someone was trying to clarify your vague post
FWIW in commercial its quite different so the simple answer is no.
Soldato
Homeowners financially are a very different set of people from the average. Disposable incomes are much higher. It’s a risk for sure but energy bills are a much smaller portion of income compared to most.
Soldato
I'm not sure that's true, a lot of homeowners will have stretched themselves to get the house, and taken the (for the last decade) reasonable risk that things wouldn't collapse almost overnight. Super low interest rates is all some people have ever known.
Soldato
Stretching yourself is really hard these days. The amount you can borrow relative to income is much less and actually checked. Also outgoings and lifestyle is taken into account. To even buy the average house you need to be pushing a household income of nearly £60k (top 10% household income)
They will be in general. When referring to a large group as an average then yes there will be some that aren’t but in general they will be.
Even if they are stretched, they will be spending less than renting the equivalent property, a lot less in reality.
People are expecting prices to fall after this fiasco is over.... Get a grip its not going to happen, while a gas bill may be less, you can forget food prices reducing same as your, gym memberships etc etc.
A family that was able to afford a couple of weeks holiday every year is now unable to save and on the breadline. Tax breaks as super **** Truss says are not going to make one bit of difference. The Tory scum have been in power for 12 years and slowly but surely their stunning monetary policy has kept wages down while profits and prices went up.
I am sick in the teeth of paying out more and more for less service, less goods and profits rise rise rise. We need a a ******* riot on the streets to kick this shamble of **** politicians down the road so they start serving the people and not the other way around. ******* utterly disgusted
A family that was able to afford a couple of weeks holiday every year is now unable to save and on the breadline. Tax breaks as super **** Truss says are not going to make one bit of difference. The Tory scum have been in power for 12 years and slowly but surely their stunning monetary policy has kept wages down while profits and prices went up.
I am sick in the teeth of paying out more and more for less service, less goods and profits rise rise rise. We need a a ******* riot on the streets to kick this shamble of **** politicians down the road so they start serving the people and not the other way around. ******* utterly disgusted
We moved in a year ago on a 2 year mortgage at around 2.9% we had wriggle room - didn’t stretch ourselves went £100,000 under what we could stretch to at the time - if interest hits 9% that’s £1100 a month more not many people would weather that plus energy bills being 3x - the country will be a mess.
For us, the interest rates will be the killer, not energy
Energy we can use less, wear a jumper etc, you can’t “not use a room” for discount
Pretty sure to get a house they have to pass a mortgage stress test which includes much higher interest rates in the calculation. As is always the case in recession, those over leveraged will suffer the worst.
Soldato
It’s so unlikely to get to 9% but as mentioned that is the limit that BoE identified. Inflation is expected to cool off next year so should be short lived. What is more likely to cause a mess is BoE get it wrong bring rates up too fast and causing a shock to industry which causes them to rein in spending which causes lots of lay-offs. That is the real red flag I would be watching for.
The bank would have let us borrow 300k.
Couldnt believe it. Felt like a ridiculous amount.
A 300k debt at 5pc would put us at 1700ppm!
If you think our electricity costs without a fix would be hitting 300 a month come October (in a summer month!)
Our CT on a house like that would be 300 a month?
Your probably up to 2500 a month in winter before food, car costs, water, insurance etc.
That would leave us with very little Wiggle room.
I personally think banks are over lending
Couldnt believe it. Felt like a ridiculous amount.
A 300k debt at 5pc would put us at 1700ppm!
If you think our electricity costs without a fix would be hitting 300 a month come October (in a summer month!)
Our CT on a house like that would be 300 a month?
Your probably up to 2500 a month in winter before food, car costs, water, insurance etc.
That would leave us with very little Wiggle room.
I personally think banks are over lending