Nationwide reporting prices rose 5.9% last year: http://news.bbc.co.uk/1/hi/business/8435745.stm . Not a bad return considering how low interest rates were for most of the year, wish I'd bought a more expensive house back in December 2008 now!
House prices..
- Thread starter fendi
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Except that this was just a run to property by cash investors who couldn't get decent returns on deposit. That is now over. The next 12 months will be roughly stagnant IMHO.
I think I might get screwed by greedy banks, my fixed 2 years is near the end now and soon I will have to remortgage. I bought my house with my brother almost 2 years ago and we were on fixed rate something along 5.8%, the mortgage is 85% value of the property.
I was getting happy since the all time low interests my repayments were going to be much lower just to see that because my mortgage is 85% they are going to put me on the very high interest rates. WTF. 2 years ago it was fine but not anymore, I never missed a payment and me and my brother have jobs, and it looks like banks can charge us whatever they want as we are suddenly a high risk for them.
I was getting happy since the all time low interests my repayments were going to be much lower just to see that because my mortgage is 85% they are going to put me on the very high interest rates. WTF. 2 years ago it was fine but not anymore, I never missed a payment and me and my brother have jobs, and it looks like banks can charge us whatever they want as we are suddenly a high risk for them.
How do you calculate the 85%? On what 'value' of the house? If the value falls by 15% there's no equity, the value may already be less than you think, the bank may be expecting 15%, 20% or even 25% falls over the next few years.
The high interest rates represents the bank's view of their chance of getting their money back if things go wrong.
Not sure if you mean this, but you won't have to remortgage when your fixed rate comes to an end. Most likely you will go onto your bank's or building society's SVR rate, which should be considerably lower than 5.8% - I was paying 4.24% on Abbey's SVR.
Also, it's probably worth contacting your existing mortgage provider to see what deals they will offer you as an existing customer. In my case, I was offered a 5 year fixed rate at 4.99% without any re-mortgage fees or revaluations (important since my home has gone down in value since I bought it), despite Abbey only offering 6.5% mortgages for similarly positioned new customers.
I don't think that my place is worth less now and even it is it's not going to be much less as I keep checking sold hose prices around in my area and they sell roughly for the same I paid 2 years ago but I suppose you can never be sure until you sell your place.
I've also been investing into my property like new boiler etc. and I paid £33k towards the property and the rest mortgage £185k - welcome to property prices in Surrey.
I think I am just screwed
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My god, has this thread really been running since 2007? How time flies 
I'm still looking unfortunately. Missed out on a couple of places last year so I've missed the low rates as well now. Having said that, the prices really haven't changed in all that time, despite everyone keep saying they are going up.
Oh well. Cheap rent here. Happy days
I'm still looking unfortunately. Missed out on a couple of places last year so I've missed the low rates as well now. Having said that, the prices really haven't changed in all that time, despite everyone keep saying they are going up.
Oh well. Cheap rent here. Happy days
We are with Abbey, we need to go and see them I think as per your advice, we haven't received any mail from them yet but still we have around 6-8 weeks of the fixed rate left.
We got the mortgage through mortgage brokers but they have already advised us not to proceed with them atm(I think they cannot offer us any reasonable deal atm).
You might not want to wait until your fixed rate runs out. Abbey contacted me after I was on the SVR for a couple of months.
Hey guys,
Quick question, lets say you have a house with a mortgage (not in negative equity) and the rent covers the mortgage.
Is it possible to still borrow 3-5x earnings to buy another house if you have a large enough deposit? (I.e. do they completely negate the outgoings of the first mortgage with the rent, or do they still take this into account?)
Cheers
Quick question, lets say you have a house with a mortgage (not in negative equity) and the rent covers the mortgage.
Is it possible to still borrow 3-5x earnings to buy another house if you have a large enough deposit? (I.e. do they completely negate the outgoings of the first mortgage with the rent, or do they still take this into account?)
Cheers
No, you can't borrow your full amount again as you've already got a mortgage. What's to say you can rent the house out for the whole term of the mortgage to cover payments?
Indeed, although it does not work quite as you imagine. You will get a broker to take into account the additional rental income, or projected income on the back of reputable agents rental valuations, but it will be classed as exactly that - income. (Exactly as if you had just taken on another Job for example).
The second mortgage company will require an deposit as normal, and the terms will be calculated based on the LTV entirely independently of the first, as if it were your only mortgage.
They will then offset the first mortgage as a regular outgoing on the application (exactly as they would do for any other regular outgoing, be it a loan, car finance, whatever), then take into account the regular additional income (the rent from the first house) and work out standard multiples and affordability from that as per usual.
This is not strictly true.
I probably will have no other option than to wait and see what Abbey will offer me. My 2 years fixed mortgage ends on 10th March. I will go and see them in about 2 weeks time as I am going on holiday tomorrow for 10 days
(snowboarding here I come).
Soldato
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Wrong. My girlfriend and I done exactly this just a few month ago. All we had to prove is we had enough coming in from rent to cover 125% of our existing mortgage commitments. One of the houses we we're living in so we had to get a rental assessment from an approved estate agent.
We were the assessed on our salaries for the new mortgage in the normal way
House prices up 8.6% Y-o-Y according to Nationwide. They are expecting the annual rise to exceed 10% soon although I suspect that will be short lived, as prices started to rise a few months into 2009.
Land registry figures show a more modest 2.5% rise Y-o-Y for December, but (as I've pointed out before), LR data lags behind somewhat so I will expect that figure to rise over the coming months. The large increase in asking prices today will filter down (albeit slightly diluted) into the sales figures for Q2.
Land registry figures show a more modest 2.5% rise Y-o-Y for December, but (as I've pointed out before), LR data lags behind somewhat so I will expect that figure to rise over the coming months. The large increase in asking prices today will filter down (albeit slightly diluted) into the sales figures for Q2.
Soldato
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A few people have a similar theory on rpi and cpi inflation. This march or so should start to see the real underlying prices as mortgage costs and oil deflation is no longer in effect YOY
Combined with a ceasing of QE could see an elastic effect where rates might rise as fast as they fell
I wont call it double dip as I think these finance clichés are overplayed, the situation should be fairly unique. Definitely seems like there is a second leg to this whole process imo
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