Mortgage Rate Rises

[jonneymendoza]

Yes but nothing gives you a god given right to purchase property in London. If you cannot afford it (I certainly cannot for what house I have here) then you either put up with renting or you find somewhere else to live.

You have millions of people all over the world come here for a better life. Would they rather live in their home country? More than likely yes but they made that decision to better their life by coming here.

Well I was born and bread in London and my family and career is here...
Although nowadays I can work from home but how long will that last until the companies want us back in the office?

Yea I don't have a god given right to live here but that's the price it is in London and my point still stands.

 

[jonneymendoza]

I agree with that too. If you have to over leverage to get on the ladder you need to look elsewhere.

Its not simple to look elsewhere...

Many factors need to be included.

Jobs and family need to be considered.

Me and my missus couldn't live anywhere outside London as we will struggle for jobs in our career and also be away from family.

We might as well leave the UK and go to another city that has jobs for our industry but remember brexit?

 

[Haggisman]

Funnily enough in my industry definitely not, my other half probably not either. (Cue you asking what sectors we work in).

Feel free to share if you want, but I'm guessing that if it's a particularly "niche" sector then wages are going to be somewhat skewed vs more common types of employment which are national (like I said, guessing, so maybe not).

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.

I'm not arguing that it isn't a nationwide problem, but some areas are significantly worse affected - there's a big difference when comparing 7.14 in Birmingham vs 12.68 in Surrey (where the poster I was quoting appears to live).

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.

How much is a train season ticket to travel into London? A zone 1-5 railcard is £80/month up here which covers the Birmingham area, plus Coventry, Wolverhampton, Walsall

 

[grudas]

How much is a train season ticket to travel into London? A zone 1-5 railcard is £80/month up here which covers the Birmingham area, plus Coventry, Wolverhampton, Walsall

my other half paid around £6k/year to get from Horsham to central london - that isn't even that far many pay much more. Think peak last she said was £50 return FOR ONE DAY.

 

[Gammawolf]

Thanks for the technical clarification - there maybe someone on here who did not know that - but i doubt it

The rates are irrelevant what matters is the ratio of mortgage repayments to income

This is a no fun zone, can't even have a small jest. Theres even an emoji in there and everything!

 

[TrojanWhore]

I think I'm on just over 2% at the moment and will be running out May/June 2024.......* gulp *

 

[Kill_Phil]

Who was the chap who got banned not too far back who used to tell people who struggled with cost of housing to just live out of a van ha

 

[Diddums]

Who was the chap who got banned not too far back who used to tell people who struggled with cost of housing to just live out of a van ha

Sounds like a Psycho Sonny comment.

 

[Kill_Phil]

Sounds like a Psycho Sonny comment.

Yeah that's the one! He would be having a field day.

 

[Nitefly]

Yeah that's the one! He would be having a field day.

Field life.

 

[Haggisman]

my other half paid around £6k/year to get from Horsham to central london - that isn't even that far many pay much more. Think peak last she said was £50 return FOR ONE DAY.

Exactly. I live 20 mins walk from a station on a direct line to New Street (~12 mins travel time), and it's £64/month for a season ticket. I'm also about 5 mins drive from the M6/M42, so travel & commuting is convenient whether it's by train or car (or bus).

Sure I don't live in the nicest area, but it's not a scummy council estate full of chavs either, just an average house on an average street. It's worth quite a bit under the £275k posted earlier which will apparently get you "nothing"

 

[adam cool dude]

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.

I live in a cheap area. Where a decent detached 3 bed house will cost you 300k. I am only 36 and my mortgage is less than 10 years till completion. We both earn above the national average. Jobs are available and exist to the point where competition for said jobs is a lot lower than in London. We also live comfortable lives in a clean and sparsely populated environment.

To live in the same house and lifestyle in the London area we would need a combined salary of around 160k a year which is just a dream to most people and I would still have to live with the commute every day. Yes the London commute made sense maybe ten to fifteen years ago but now the pricing of housing you need it is just madness. Even outside of the commuter belt. My job is 6 miles down the road and takes 10 minutes to get there. The partners 13 miles which takes 20 minutes.

It does seem a lot of people are realising this as WFH starts to become more common. Houses were selling in a matter of weeks after Covid. Our area went up 18% alone last year which was the biggest increase in 19 years.

My family live all over the world ranging from Australia to Canada so travelling distances to visit doesn't really bother me. It is also great because I live in the midlands I am not limited to the London area. I can get to Birmingham and Manchester in a couple of hours in a car.

I just did a quote for my remaining term where I am paying a measly £500 a month. A similar house to mine in the London area is 900K+. To finish in the same term at current interest rates I would need to be paying £5400 a month mortgage or an extra 60k a year to my salary . That would be with a healthy 200+K deposit as well to get a decent rate.

 

[glenimp617]

Exactly. I live 20 mins walk from a station on a direct line to New Street (~12 mins travel time), and it's £64/month for a season ticket. I'm also about 5 mins drive from the M6/M42, so travel & commuting is convenient whether it's by train or car (or bus).

Sure I don't live in the nicest area, but it's not a scummy council estate full of chavs either, just an average house on an average street. It's worth quite a bit under the £275k posted earlier which will apparently get you "nothing"

I'm confused, how are you paying £64 a month and grudas mrs is paying £500. I've missed something obvious here.

:edit: Helps if I scroll up a bit, totally different city

 

[grudas]

Exactly. I live 20 mins walk from a station on a direct line to New Street (~12 mins travel time), and it's £64/month for a season ticket. I'm also about 5 mins drive from the M6/M42, so travel & commuting is convenient whether it's by train or car (or bus).

Sure I don't live in the nicest area, but it's not a scummy council estate full of chavs either, just an average house on an average street. It's worth quite a bit under the £275k posted earlier which will apparently get you "nothing"

but you're in birmingham? if your life is there then great but for me to get to see my family would be a 6hr round trip, my other half would never see her mom, brothers etc.. all these things are worth paying a bit extra. My friends etc are all here. I've moved countries already and I can tell you that starting life from scratch in a different location is a very hard thing to do, never mind at my age.

I'm confused, how are you paying £64 a month and grudas mrs is paying £500. I've missed something obvious here.

one in birmingham one is in one of these "cheap" commuter towns outside london..

 

[Haggisman]

I'm confused, how are you paying £64 a month and grudas mrs is paying £500. I've missed something obvious here.

:edit: Helps if I scroll up a bit, totally different city

hehe, yes was going to say, that's the difference between commuting in Birmingham vs commuting in London, and why living in a nice town/village a few miles away isn't as a big a deal as it would be in the South East

I live in a cheap area. Where a decent detached 3 bed house will cost you 300k. I am only 36 and my mortgage is less than 10 years till completion. We both earn above the national average. Jobs are available and exist to the point where competition for said jobs is a lot lower than in London. We also live comfortable lives in a clean and sparsely populated environment.

To live in the same house and lifestyle in the London area we would need a combined salary of around 160k a year which is just a dream to most people and I would still have to live with the commute every day. Yes the London commute made sense maybe ten to fifteen years ago but now the pricing of housing you need it is just madness. Even outside of the commuter belt. My job is 6 miles down the road and takes 10 minutes to get there. The partners 13 miles which takes 20 minutes.

It does seem a lot of people are realising this as WFH starts to become more common. Houses were selling in a matter of weeks after Covid. Our area went up 18% alone last year which was the biggest increase in 19 years.

My family live all over the world ranging from Australia to Canada so travelling distances to visit doesn't really bother me. It is also great because I live in the midlands I am not limited to the London area. I can get to Birmingham and Manchester in a couple of hours in a car.

Yup - no jobs in your sector in an area is a perfectly valid argument to moving away, and does make it a bit harder to do so, but in terms of leaving family behind, unless you're their carer, then you need to figure out exactly what your priorities are.

Plenty of people have and do move away from where they grew up (I live 250 miles away from where I was born, and 120 miles from where I spent most of my teen-20s, my mum lives 200 miles away and my brothers both live ~100 miles away). If you're not prepared to at least consider the option, then to be honest I don't see how you have any excuse to complain about it. I'd much rather live in Cornwall/South Wales by the sea than in the suburbs of Birmingham, but we don't all get what we want - life isn't fair

 

[Haggisman]

but you're in birmingham? if your life is there then great but for me to get to see my family would be a 6hr round trip, my other half would never see her mom, brothers etc..

So you're in the exact same position as me and my family then

all these things are worth paying a bit extra.

If you can afford it then that's great - you're lucky enough to get the best of both worlds. Unfortunately there are people who can't afford it, but are unwilling to even entertain the prospect of having to move a couple of hours away from their family in order to be able to buy the house they believe they deserve.

 

[Azza]

41% of mortgage products have been removed since the 'mini-budget'.

 

[GuruJockStrap]

Incredible how quickly this is moving.

We moved house during Covid in April 2021 and I fixed for 5 years at 1.39%. Our LTV today is around 45% and thankfully our mortgage is the only debt we have.

Lord knows what the situation will be in 5 years time but this is going to prompt me to start making overpayments so that in 5 years time, we're in the best possible shape to deal with whatever the rate will be when it comes to re-mortgaging. Unfortunately, that's money that won't now be going into the general economy but I'll be mortgage free hopefully a lot sooner than planned.

What's the general view on making overpayments? Overpay whatever you can now on a monthly basis or squirrel the money away into a savings account (hopefully better interest than around 4%) and then put that down as a deposit when re-mortgaging?

 

[jonneymendoza]

I live in a cheap area. Where a decent detached 3 bed house will cost you 300k. I am only 36 and my mortgage is less than 10 years till completion. We both earn above the national average. Jobs are available and exist to the point where competition for said jobs is a lot lower than in London. We also live comfortable lives in a clean and sparsely populated environment.

To live in the same house and lifestyle in the London area we would need a combined salary of around 160k a year which is just a dream to most people and I would still have to live with the commute every day. Yes the London commute made sense maybe ten to fifteen years ago but now the pricing of housing you need it is just madness. Even outside of the commuter belt. My job is 6 miles down the road and takes 10 minutes to get there. The partners 13 miles which takes 20 minutes.

It does seem a lot of people are realising this as WFH starts to become more common. Houses were selling in a matter of weeks after Covid. Our area went up 18% alone last year which was the biggest increase in 19 years.

My family live all over the world ranging from Australia to Canada so travelling distances to visit doesn't really bother me. It is also great because I live in the midlands I am not limited to the London area. I can get to Birmingham and Manchester in a couple of hours in a car.

I just did a quote for my remaining term where I am paying a measly £500 a month. A similar house to mine in the London area is 900K+. To finish in the same term at current interest rates I would need to be paying £5400 a month mortgage or an extra 60k a year to my salary . That would be with a healthy 200+K deposit as well to get a decent rate.

I wouldnt bank on WFH.

where my missus works, they want them to come into the office 3 times a week now...

Businesses are beginning to tell there eompoyees to come into the office a few times a week.

And this is why i kept saying here, "Good luck getting a LTV of 40% lol" It all depends where you live/want to live.

I stand by what i said, in london, not many have a LTV of 40% as a first time buyer so many here have to make do with 85-90% LTV and even that is a struggle and a huge achievement.

The thing is though, places like Amsterdam is actually worse off then london in terms of trying to buy a property in the city.

Dont kid yourself, Almost every major city in the world has a housing crisis.

Tokyo? LOL forget about owning a property. Hong Kong? hahah dont make me laugh... New York? only if your wealth is the same as Jay-z the rapper.

Whats funny is that places like Birmimgham , cambridge and oxford are becoming as difficult as london to own a property....

Its spreading and soon the town/village you live in will see most people only able to afford LTV of 85-90%

 

[413x]

Incredible how quickly this is moving.

We moved house during Covid in April 2021 and I fixed for 5 years at 1.39%. Our LTV today is around 45% and thankfully our mortgage is the only debt we have.

Lord knows what the situation will be in 5 years time but this is going to prompt me to start making overpayments so that in 5 years time, we're in the best possible shape to deal with whatever the rate will be when it comes to re-mortgaging. Unfortunately, that's money that won't now be going into the general economy but I'll be mortgage free hopefully a lot sooner than planned.

What's the general view on making overpayments? Overpay whatever you can now on a monthly basis or squirrel the money away into a savings account (hopefully better interest than around 4%) and then put that down as a deposit when re-mortgaging?

I'm planning to wait until I think rates have peaked. Then lock into a hopefully 5pc plus locked for 2-3 years account. Cash out after term and plough into mortgages (if the landscape still suggests that's the best thing)

Currently 4pc lock ins are available