Energy Prices (Strictly NO referrals!)

I do have a bit of sympathy for people in the firing line if mortgage rates went up a few percent. However if they are right on the edge of affordability there's any number of sudden price increases that could put them over the edge.
That's the reason why despite being able to get a mortgage for £350,000 we went with a £250,000 house and try get it paid off in 15 years. (I do understand that's not realistic for some people)
 
413x said:
But inflation only really benefits if it affects your wages ?
If you don't get that inflationary pay increase and everything goes up around you that debt is still just as big as it was. (at a personal level)

I think stress testing to 7 and is personally correct. But I have low costs. And I'd still be against the wall. It would be a miserable (by my past standards) way to live.
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So no different to how things were 20-30 years ago. It was pretty much accepted back then that when you bought a house you pretty much had to dial all spending back, and if you wanted some free cash take on a lodger. All of my friends, plus myself, took on lodgers once we had bought our first properties.
 
Energize said:
Unless you're in debt higher interest rates are a good thing. Even a small amount of money in savings yields returns whereas things like rent remain at a fixed rate so you end up better off.
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You think landlords wouldn't increase rents as soon as they are able to cover their increased costs?

Mercenary Keyboard Warrior said:
People also forget however that inflation reduces debt in real terms every year. Say you have a £1000 mortgage, if inflation is 2% in real terms assuming you do get inflationary rises then you mortgage is 2% cheaper each year (Year one £20, year two a little more). Not in cash terms, but in real terms.
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That's quite an assumption to make though, particularly in the last couple of years, plenty of companies seem to have used covid as an excuse not to give any payrise with the excuse of "you're lucky to have a job at all". While I'm sure this is justified in some cases, others will just be jumping on the bandwagon to save themselves a few ££

Alibaba99 said:
So no different to how things were 20-30 years ago. It was pretty much accepted back then that when you bought a house you pretty much had to dial all spending back, and if you wanted some free cash take on a lodger. All of my friends, plus myself, took on lodgers once we had bought our first properties.
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It's interesting how a regression in standard of living is seen as acceptable (or even desirable) by some. Obviously some sacrifices always have to be made in life, but in general you'd expect standards of living to increase overall. Otherwise why are we not all still living in caves? (or is that the desired endgame?)
 
Alibaba99 said:
So no different to how things were 20-30 years ago. It was pretty much accepted back then that when you bought a house you pretty much had to dial all spending back, and if you wanted some free cash take on a lodger. All of my friends, plus myself, took on lodgers once we had bought our first properties.
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Yeah basically. It's not something my generation has really had to consider. Nor would we have the space for.
 
Alibaba99 said:
So no different to how things were 20-30 years ago. It was pretty much accepted back then that when you bought a house you pretty much had to dial all spending back, and if you wanted some free cash take on a lodger. All of my friends, plus myself, took on lodgers once we had bought our first properties.
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First time buyers are in their 30s. Having a lodger isn't suitable for many family homes.

It is most certainly nothing like it was 20-30 years ago and anyone that's claims so is deluded, but then they are in a position for that delusion to not affect them.

Fine, if you're young, single etc, have someone in your spare room.

Personally, having a lodger would actually impact my employment due to home working and sensitive conversations.
 
MikeTheNative said:
House prices have gone mental the past few years.
Any comparing things now to what they were like 20-30 years ago needs to go look at the price to wages.
https://www.newstatesman.com/politics/2021/05/how-uk-house-prices-have-soared-ahead-average-wages
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Older people always seem to point to the sky high interest rates they had to pay. Forgetting the price:wages ratio.

Interest rates can't really go any lower than they are so really only headwinds are possible.

I'd love house prices to moderately fall. But for those who have just bought they obviously don't want that.
The governments stamp duty break was a bit disgusting if you ask me and there was. O need for it.
 
413x said:
Yeah basically. It's not something my generation has really had to consider. Nor would we have the space for.
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Oh yea, that's anoth thing indidnt consider, first time buyers are more likely to only get on the ladder with 1 bed flats. Can't fit a lodger in then. How ignorant of the current situation.
 
Fubsy said:
First time buyers are in their 30s. Having a lodger isn't suitable for many family homes.

It is most certainly nothing like it was 20-30 years ago and anyone that's claims so is deluded, but then they are in a position for that delusion to not affect them.

Fine, if you're young, single etc, have someone in your spare room.

Personally, having a lodger would actually impact my employment due to home working and sensitive conversations.
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True, my parents had a lodger when they were living as a couple but wouldn't have done it when they had a young family.

Today most people stay in a house share longer than previous generations to save for a deposit
 
Fubsy said:
Oh yea, that's anoth thing indidnt consider, first time buyers are more likely to only get on the ladder with 1 bed flats. Can't fit a lodger in then. How ignorant of the current situation.
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We both work from home. Simply isn't the space to have a lodger. I can't even imagine how horrible that would be. I'd rather sell up, buy a cheap flat and not need a lodger. Couldn't handle it.
 
The crazy thing is that it's not just one thing. This thread is about energy, but moving on to affordable housing.

  • Wages not really going up for the vast majority of the population. Moving jobs helps boost earnings though.
  • Energy prices set to double
  • Fuel at the pump on the way to crazy levels.
  • Food going up.
  • Mortgage rates set to increase.
  • NI rises next month.
  • Council tax as usual going up.
  • Broadband (a necessity nowadays) on some contracts going up 10%
  • Building materials way more expensive.
More is going to get added to that list and I bet I've missed something obvious too.
 
Fubsy said:
The crazy thing is that it's not just one thing. This thread is about energy, but moving on to affordable housing.

  • Wages not really going up for the vast majority of the population. Moving jobs helps boost earnings though.
  • Energy prices set to double
  • Fuel at the pump on the way to crazy levels.
  • Food going up.
  • Mortgage rates set to increase.
  • NI rises next month.
  • Council tax as usual going up.
  • Broadband (a necessity nowadays) on some contracts going up 10%
  • Building materials way more expensive.
More is going to get added to that list and I bet I've missed something obvious too.
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This is why I'm thinking about locking in now.
I did the same with energy and it means I have 3 years of no worries.
I know I won't be money stressed.
It's almost worth the 2k just for that.
2k isn't even much in grand scheme.
 
Freakbro said:
Sorry, I saw your notification yesterday but was out till early hours.

As you realise, the simple answer is because it benefits us. No/low debt and plenty of savings to get a return on. Uther especially, as he has now been forced into early retirement due to Covid, so a greater proportion of income would come from higher interest rates.

But for some reason, that there are some people who would benefit from high interest rates rather than virtually zero ones, seems to upset some people!
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@Richie basically this. Sorry if it upsets anyone.
 
Haggisman said:
Obviously some sacrifices always have to be made in life, but in general you'd expect standards of living to increase overall. Otherwise why are we not all still living in caves? (or is that the desired endgame?)
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There is no general rule of increasing standards of living! The last couple decades have been the exception not the rule. Looking further back the last 200 years have been an incredible *exception* not the rule. Over the last 10,000 years the general standard of living has been up and down dramatically, civilisations rising and falling. The last two hundred years of the 'carbon pluse' has been truelly exception and only a fool would consider this trajectory a sustainable general rule.
 
Uther said:
@Richie basically this. Sorry if it upsets anyone.
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Everyone is in a different boat and everyone is selfish.

I'd love house prices to drop a bit so when come to buy next house it's closer.
But I don't want a huge 50 percent negative equity crash! :D

But I have friends waiting to buy in safe jobs who'd love that very thing.

Everyone is in different positions.
 
413x said:
This is why I'm thinking about locking in now.
I did the same with energy and it means I have 3 years of no worries.
I know I won't be money stressed.
It's almost worth the 2k just for that.
2k isn't even much in grand scheme.
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Not that I'm a financial advisor, but why wouldn't you lock in now? Costs are only going in one direction imo...
 
Uther said:
Not that I'm a financial advisor, but why wouldn't you lock in now? Costs are only going in one direction imo...
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Most have told me not to. But I'm talking myself into exactly what you say. More I think about it. More it seems sensible. Even if rates do drop. Its going to be max 100 ppm
On upside.. Well. Who knows.

Only reason not to is to wait until September. When I can lock in without that 2k fee. That's the decision.
 
Uther said:
Not that I'm a financial advisor, but why wouldn't you lock in now? Costs are only going in one direction imo...
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It's the upfront cost of the early repayment charges.
We did it in December with a year left on the fix as we were able to fix down to 1.75 from 3.45* as we worked out if interest rates were to go up we'd either at least break even or be better off, with the bonus of no surprises on the mortgage for the next 5 years.

*(higher LTV gives worse rates, there's that lovely catch to deal with as well if you don't have a massive deposit, so 80-95% mortgages could be even more unaffordable for FTBs trying to save and buy :( )
 
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