Your location is Surrey, if they are also in Surrey and they can't afford to buy, or a house is out of their price range, perhaps move to a cheaper part of the country.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Soldato
the reality is that "cheap" parts of country are cheap due to low demand, if people moved to those cheap parts, they won't stay cheap for long as demand increases.
life is not that simple, moving hours away from everyone you know, your family etc is not an option to many. Cmon.
Soldato
Of course it's an option. It may not be an option they want to take, but it is an option. Of course that does also mean that they need to deal with the consequences of not taking that option - e.g. not being able to afford a house where they want to stay.
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Don't be silly. Everyone can move to some Welsh town and buy a house for £cheap! We're just too dumb to realise it!
Nevermind the fact that the reason houses are cheap is because there are no jobs in the town, so you'd be straight on the dole and living your best life with your new mates down the pub (which has closed, sorry) and nothing else to do all day but stare at your partner, who keeps telling you that her minimum wage shop job at 20hrs a week can't cover the food bill this week, let alone the heating (jokes), so you're having cabbage soup for the third day running wondering how you went from two higher-than-average earners who commuted into London with good jobs, good prospects, and a good social life with lots of friends and family nearby and money to spend... But somebody on a computer forum told you were stupid for spunking a third of your income on that two bedroom flat rented flat in Guildford to do so, let alone trying to buy something in Surrey, so now you're here.
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Soldato
I think we'll find that many recent buyers - even in our case, ended up being stress tested to 4% for e.g. and our affordability checked to that level, any more and many will struggle.. so in a way, it is banks, goverment etc who put people in this possition.
we calculated our offordability personally to 6-7% any more than that and it'll be a stretch, we're talking a good 800-1000 extra a month. Insane amount.
surely if xyz bought a house, then they could afford it? stress tested by bank, had deposit etc. The offordability changing now is not their fault. What are they meant to do? prepare for 25% interest rate? and maybe a 40% fall in value?
I think a lot of this dicussion right now is out-right panic with no real clue of what is going to happen. We can all predict xyz but if we look at the last 3 years on this planet we'll see that we can't predict anything and things can change extremely quickly. Who's to say that rates won't drop? who's to say that rates won't reach 40%? it's all a mess and people in charge are making it much worse every day.
Soldato
Don't be silly. Everyone can move to some Welsh town and buy a house for £100k! We're just too dumb to realise it!
Nevermind the fact that the reason houses are cheap is because there are no jobs in the town, so you'd be straight on the dole and living your best life with your new mates down the pub (which has closed, sorry) and nothing else to do all day but stare at your partner, who keeps telling you that her minimum wage shop job at 20hrs a week can't cover the food bill this week, let alone the heating (jokes), so you're having cabbage soup for the third day running wondering how you went from two higher-than-average earners who commuted into London with good jobs, good prospects, and a good social life with lots of friends and family nearby and money to spend... But somebody on a computer forum told you were stupid for spunking a third of your income on that two bedroom flat rented flat in Guildford to do so, let alone trying to buy something in Surrey, so now you're here.
You realise there are places in the country which lie between the extremes of "London" and "abandoned Welsh mining hamlet"?
A quick look on Rightmove shows there are over 5,000 2+ bedroom properties within 20 miles of Birmingham city centre. Are you seriously trying to suggest that there are no jobs in the 2nd biggest city in the UK?
Not sure if you replied to the wrong post, but this has nothing to do with whether moving to a cheaper part of the country is an option.
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Not sure you'd want to live in most areas around the city centre tbf
In the same boat around extra 800- 1000 per month. We can afford but wont be spending much on anything else.
Apparently our mortgage was stress tested to 8% according to nationwide
Not really, £250k gets you a house in places of the country which are commutable to plenty of places.
Yes it is. I've done it, many others have. You can always move back once on the ladder.
The problem is most people who cry about not being able to afford a house are also driving around in a brand new car, with a brand new phone, in designer clothes, latest game consoles and a LOL sized TV, whilst stuck in their low paying jobs and complaining about those who earn more. Even if London is on their doorstep. And location means very little anyway as you can get some really well paid jobs for working at home. Whether people want to pull their finger out and work for it is another matter.
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Soldato
Hence why i went for a 20 mile radius
Plenty in the much nicer towns and villages around which are easily commutable.Sorry if they don't come with a swimming pool, 20 acres of land, and a beachside view (and heaven forbid you might actually have to live next door to someone). Sometimes you have to make sacrifices.
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Associate
personally i think were gonna be seeing 6-7% before the tax year is out.
I gave a few friends a similar warning when it looked like 5% before xmas, they decided not to eat a 1% erc fee and will now be looking for a mortgage next year when their 5yr fix ends.
will likely be historic lows to historic highs in the space of a month for them
I just want to point out that 6-7% is no where near historic highs
Its more closer to historic "normal"With the amount of debt around today and the price of houses, 6% today would be like 25% historically.I just want to point out that 6-7% is no where near historic highs
Apples and Oranges. Current interest rates are comparable to those historic ones always quoted due to inflation, cost of living, house prices etc.I just want to point out that 6-7% is no where near historic highs
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Soldato
when debt was 80k the 7% was easy. when debts are 300-500k that 7% is a huge amount. We're not in the 80s.I just want to point out that 6-7% is no where near historic highs
Of course, I was making a point. These discussions always go the way of someone posting a Rightmove link of some random town in the sticks.
Funnily enough in my industry definitely not, my other half probably not either. (Cue you asking what sectors we work in). Affordability is a problem in this country across the board, what is the income ratio to house prices in that area you searched? Oh I'll save you the effort https://lginform.local.gov.uk/repor...Country_England&mod-type=namedComparisonGroup it appears to be 7.14. Not exactly affordable. Yes you'd get cheaper further out (unclear what area of Birmingham that covers) but then of course you're paying higher commuting costs. It's like London, just lower income and lower costs. The ratios don't actually change a vast amount - although granted in London and the SE it is much higher.
But more importantly (and on topic) what @grudas was saying is right. Affordability wasn't down to the borrower... banks check this as well so it's be interesting to know at what %age was common, what income ratio etc.
Associate
Yes i'm aware of that, but to claim historic highs is not technically correct as its not historic highs
Soldato
I just want to point out that 6-7% is no where near historic highs
I suggest you read this: https://twitter.com/EdConwaySky/status/1572975530722627584?s=20&t=7q1CjK93Sbu00glmdyOosg
Interest rates in the 1980-1990 are effectively equivalent to now one you factor in debt, income, mortgage terms etc. The 10-15% interest rates 30-40 years ago were relatively far more affordable, and are equivalent to 2-4% rates now.
Thanks for the technical clarification - there maybe someone on here who did not know that - but i doubt itYes i'm aware of that, but to claim historic highs is not technically correct as its not historic highs
The rates are irrelevant what matters is the ratio of mortgage repayments to income