Interest rates increased

Freakbro said:
I've been hearing people say that for over 20 years
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We had approx 20% drop 2008. Estimates vary, but most are around the high teens levels.
Certainly some areas saw in excess of 20%

No one sensible wants to see high price deflation (not saying you want this), it causes massive issues for normal people and really drags on the economy. What we need more than anything is supply side suppression of house price inflation that keeps them at very low inflation levels for years.
Easy to say, difficult to achieve.
 
Mercenary Keyboard Warrior said:
We had approx 20% drop 2008. Estimates vary, but most are around the high teens levels.
Certainly some areas saw in excess of 20%

No one sensible wants to see high price deflation (not saying you want this), it causes massive issues for normal people and really drags on the economy. What we need more than anything is supply side suppression of house price inflation that keeps them at very low inflation levels for years.
Easy to say, difficult to achieve.
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2008 was a totally different event compared to what could happen now. Folk are stretched but not on pure affordability.
 
dLockers said:
2008 was a totally different event compared to what could happen now. Folk are stretched but not on pure affordability.
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Not really

What tends to happen is an event triggers a recession, that recession will cause a significant impact to peoples finances and the demand side will be impacted.
When people loose jobs and there is a poor job market they tend to try to downsize/sell up to avoid reposession etc

2008 was slightly unusual but the impact on house prices and ability to get finance was not that different to what happens whenever the bad times roll

I remember the late 80s recession. The housebuilder whos estate my parents had moved onto just stopped work within a couple of weeks. For around 3 years there were houses from dug foundations, to foundations slabs to low brickwork to mainly shell level (ie anything upto pre roof timber) just sitting there unfinished.
Once the better times rolled again he just started off again. He actually only had 3 employees all the rest was subcontracted, the 3 remained on his staff (one lived a few doors away from my folks) keeping an eye on things, the rest were gone he just said no work sorry, that was demand led.

In bad times lenders also become more strict typically which is all part of the cycle of boom and bust in the house world.
 
moon man said:
@Mrwong it says on the graph source nationwide 2021 ,a quick google will find the nationwide report 2021 with the the same graph dated jan 21
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it says uploaded 2017 how does that work, unless it is forecast data, also look at the time variation. Also these are FTB only, is this sum of regional etc... was this IO or FP mortgages, no link to the actual data or source of the data, or how it was collected. Looking at the data visualisation it seems to be distorted.
 
We're trying to buy a new house (actually our 4th attempt in a year after the other 3 got taken off the market by the sellers).

That meant having to apply for 4 mortgages over the last year. The rate increases I've seen on those 4 mortgages is interesting. It went from about 1.55 to 2.5 from year to year.

I can only assume it would be higher after the latest rise. Thankfully we got the 4th mortgage in about 2 weeks before the last rate rise.

It will be interesting negotiating the rate of the other part next year...
 
danlightbulb said:
If I recall correctly, we've never seen a nominal drop in house prices. A drop is only visible when the figures are inflation adjusted. In nominal terms, they just go flat for a while.
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1989 to 1990 says hi!
Massive actual drops followed by stagnation until about 2000

Brought on by the end of joint MIRAS, unemployment and interest rates.

I bought a 3 bed terraced house in 87 for 34k, could have sold it for 74k but got made redundant and flogged it for 56k, put the money in savings where it got decent interest, went on a 5* holiday and a year or so later bought a brand new 4 bed detached for 74k, tbh I've never looked back so to speak, retired early and mortgage paid off.
 
First mortgage was @ 9% remortgaged at 5% and carried on paying that amount once the rate dropped to .5% I have 3 years left now thanks to the over paying

Life time tracker at +0.25%
 
LabR@t said:
First mortgage was @ 9% remortgaged at 5% and carried on paying that amount once the rate dropped to .5% I have 3 years left now thanks to the over paying

Life time tracker at +0.25%
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This is what we have done.

First 5 year fixed at 5%
Second 5 year fixed at 2.5% kept payment the same

Would have paid it all off in the next 3 years as we kept payments constantly + overpayment.

However decided to buy a much bigger house.

Fixed a year ago (with house Move) at 1.34% keeping payment the same. But we are overpaying £600 per month so by the time we remortgage at 3-5% we will have paid off such a big chunk our repayment will be lower.
 
Energize said:
Fantastic, was trying to find that data. So while 15% of our take home pay went to mortgages at the start of 1995 that had increased to over 32% by the end of 2020, and with Rishi's NI increase reducing our take home pay and house prices and the interest rates going up I would not be surprised to see that hit 40% by the end of the financial year.
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Don't forget though that NI isn't paid on the first £12,570 where as before the increase it was paid after the first £9,880 of earnings. From what I can see if you are earning less than £50k you will be better off.

EDIT: Sorry, the cut off is somewhere in the £30k mark
 
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englishpremier said:
Don't forget though that NI isn't paid on the first £12,570 where as before the increase it was paid after the first £9,880 of earnings. From what I can see if you are earning less than £50k you will be better off.

EDIT: Sorry, the cut off is somewhere in the £30k mark
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And not implemented till July IIRC.
 
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