Interest rate doubled (increased by the least it realistically could have)

darkgen said:
I can't see it going anywhere near that for 10 plus years. If anything, interest rates will continue to sit at 1% for another decade.
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You can't see anything in the near future which has huge implications for the UK ecomony?

The only reason nothing much has happened is because leaving the EU has not actually happened.
 
Got a 2 year fixed mortgage earlier in the year - not bothered by the rise tbh. It’s only going back up to what it previously was and you can face big break penalities if you can fix for too long and subsequently want to move *shrug*

Probably will 2 year fix for the foreseeable future as up until recently the increase in the fixed rate between 2 and 3 year fixes has always been more than the inevitable rise in interest rates... by .25 / .5%

Will see what happens over the next couple of years!
 
Hotwired said:
You can't see anything in the near future which has huge implications for the UK ecomony?

The only reason nothing much has happened is because leaving the EU has not actually happened.
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Whatever the outcome; keeping interest rates low is the only viable option.
 
DXP55 said:
Roll on 5% at least
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I think the absolute maximum this country can withstand anytime soon is around 3%. Any higher it will cause serious economic hardship for many people, businesses and the government.

Mortgage rates are currently roughly base + 1%. If rates went up to 5%, the effect would be.

£100k - £400 -> £644 per month.
£200k - £800 -> £1,289 per month.
£300k - £1,200 -> £1,933 per month.
£400k - £1,600 -> £2,577 per month.
£500k - £2,000 -> £3,222 per month.

£300k isn't an unusually high mortgage for a recent first time buyer. A rise to 5% would see them loosing £800 a month. The BoE doesn't need to raise rates that much to have a huge impact on peoples budget. Especially when people face high price inflation and little to no wage inflation.

The average UK mortgage is £120k, and in London and the South East (roughly a quarter of the UK population) it's in excess of £200k

The 0.25 rise alone will be enough cause some serious jitters. It will be interesting to see what unfolds over the next couple of months.
 
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Moses said:
Borrowing £300k isn't an unusually high amount for a first time buyer? I'd say it is. In 2012 the average cost of the home for a first time buyer was £173k. It'd only have a chance of being normal in London.
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Or most of the Home Counties, Cambridgeshire, Oxfordshire, Bristol, Brighton, Parts of Devon, Dorset and Cornwall.

That's a lot of people. At least a third of the UK population.
 
Moses said:
You don't need to borrow £300k - so spend about £330k - to get somewhere as a first time buyer in Devon/Cornwall/Bristol/Epsom (Surrey). I can't speak for everywhere, but I'd be surprised if you can't get somewhere suitable for first time buyers in most of those places for under that in all of those places, tbh. Assuming reasonable expectations in terms of size/number of bedrooms/etc.
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You might be able to find cheaper property, but not much. £1,200 a month repayment is affordable for lots of people, so a £300k mortgage isn't unusual.

£2,000 repayment is much less affordable.
 
1.2k mortgage is not affordable at all, that's insane, for properties to become affordable again for the masses, a basic house 1-2 bed needs to be around the 500 mark, I rent a 2 bed flat for 450 a month, no way on earth I could get the same on a mortgage.

go back 20 years and a single person on an average income could afford a home of their own no problem.
 
MadMossy said:
1.2k mortgage is not affordable at all, that's insane, for properties to become affordable again for the masses, a basic house 1-2 bed needs to be around the 500 mark, I rent a 2 bed flat for 450 a month, no way on earth I could get the same on a mortgage.

go back 20 years and a single person on an average income could afford a home of their own no problem.
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I was renting a two bed flat for £510. 4 bedroom semi new built and my mortgage payments are £532. The monthly payments are not the issue, but the deposit is. Someone on minimum wage, will not be able to save fast enough over increasing house prices. Depends where you live though I guess...
 
Moses said:
FYI about three quarters of home purchases by first time buyers in 2016 were under £250k.

http://www.mortgagesolutions.co.uk/news/2017/01/13/average-first-time-buyer-deposit-doubles-32000/

And,



http://www.independent.co.uk/proper...halifax-first-time-buyer-review-a7831816.html



Where have those goalposts gone?
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Your statistics really back up my point. The averages in London and the South East were £400k, and £276k respectively. The Average.

MadMossy said:
1.2k mortgage is not affordable at all, that's insane, for properties to become affordable again for the masses, a basic house 1-2 bed needs to be around the 500 mark, I rent a 2 bed flat for 450 a month, no way on earth I could get the same on a mortgage.

go back 20 years and a single person on an average income could afford a home of their own no problem.
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You cannot get a house of any size in these parts for much under £300k. People are still queuing up to buy them. If you're lucky, you might get a garden.
 
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After watching that documentary tonight about the super rich and “us”, where are we actually heading ?

Im lucky I guess and managed to get a mortgage. I haven’t gone crazy so it would take something seriously drastic for me to not be able to make the repayments but who knows.

I know fair few people that push their finances to the limits , not because they are being daft but simply because they don’t have much choice. Hard working educated people that are living on the edge , what a world.
 
Stretch said:
Your statistics really back up my point. The averages in London and the South East were £400k, and £276 respectively. The Average.
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Yes but those values are heavily skewed. As I posted on here recently, I was working at a property which my client purchased for £25 million. On a street where every house is worth at least £4 million. Imagine what that could do to averages...
 
Dis86 said:
Yes but those values are heavily skewed. As I posted on here recently, I was working at a property which my client purchased for £25 million. On a street where every house is worth at least £4 million. Imagine what that could do to averages...
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To a first time buyer. Lucky chap.
 
About £30 more on a £200+k mortgage. I don't think I'll notice it and still cheaper than fixes I could have had...
Id start to struggle on 5+% but don't think that'll happen within 5 years easily!
 
Moses said:
You haven't demonstrated that. I've pointed out that 75% are under £250k (250 being the price, so lower than that in terms of mortgage). Do you have similar figures for what proportion are over £330k, for example? What's your evidence? I'm dubious about assertions from you given you've already claimed, then backtracked on, things you've said about house prices across swathes of the country...
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Even if you have demonstrated that 75% are under £250k (which you haven't), that still leaves 25% that are, which is not an insignificant number.

I'm not backtracking on anything. I just can't be bothered to argue the toss between London and the South East, and London and the Home Counties. The other places are all as expensive. I know because I live or have lived there, and I'm of the age when people have recently bought their first property.

I'm about to buy my second place this month. My mortgage will be well over £300k
 
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