Mortgage Rate Rises

[danlightbulb]

Lots of words that basically confirm your initial statement was incorrect.

Its not unusual to add a list of requirements when purchasing something, but adding them basically means you have not bought the cheapest available as thats all you can afford, you have bought the cheapest available that meets your conditions.
The conditions will be heavily influenced by your position. Eg if I gave you £500k tomorrow I suspect your cheapest property would be somewhat different to the one you are in now, since you would change some of your conditions.

I didn't buy the cheapest house I could, I could have purchased a house for half what i did, I didn't either take the max mortgage I could, nor for as long as I could.

Buying a house is subjective and emotional. Eg you wouldnt let me select your house for you would you? Why? Simply because most of the buying decision is not simply buying the cheapest, but ticking the subjective boxes whilst allowing emotion to run riot.

Yeah fair enough.

However I think that the suggestion that lots of people could have bought cheaper houses, whilst technically true, is not a fair critisicm for most people. The key question is whether or not those needs are genuine or just wants.

As an easy example, is it fair to criticise someone for buying in a nicer road when a cheaper house in a ghetto street was available? If that person has bought on Mayfair when they couldn't really afford to then I can see the point but if that person is just trying not to buy a house in a ghetto (which is perfectly reasonable) then its not a fair criticism.

If the standard of housing and neighbourhoods in this country was better then maybe this would be fair.

 

[fez]

Yeah fair enough.

However I think that the suggestion that lots of people could have bought cheaper houses, whilst technically true, is not a fair critisicm for most people. The key question is whether or not those needs are genuine or just wants.

As an easy example, is it fair to criticise someone for buying in a nicer road when a cheaper house in a ghetto street was available? If that person has bought on Mayfair when they couldn't really afford to then I can see the point but if that person is just trying not to buy a house in a ghetto (which is perfectly reasonable) then its not a fair criticism.

If the standard of housing and neighbourhoods in this country was better then maybe this would be fair.

Almost everyone buys "wants" rather than "needs". No one needs a garden. No one needs to live within a mile of the station. No one needs a spare bedroom. No one needs off street parking. My partner and I could have a 2 bedroom flat that perfectly fulfils our needs. Go to any poorer country and you will realise that the idea of need is completely arbitrary. People say they need a big Chelsea tractor because they are having a kid. Of course they don't. People have been having 3 kids and stuffing them into a 2CV for years. Its almost entirely want and convenience. Thats fine. If you can afford to indulge that then crack on, we certainly have. You can't argue that people are buying the only house/flat they can afford when they are making these choices though.

 

[413x]

Kind of agree.

Need.
If you define need as "survive" all you need is a 1 bed flat.

You might need parking for a job you travel far too. But you don't need much else. Me and my partner rented a 1 bed flat and it was livable. But only just. It was taking its toll.

Add work from home and you probably need 2 bed for 2 people.

But really, for 2 people, you don't need:
Garden.
3 bed,
Detached,
Drive,
Garage,
Nice area,
Etc

Still living in the same 'region' I think if I really cut costs I could probably find somewhere over 100,but under 150 that was more than livable

 

[danlightbulb]

Almost everyone buys "wants" rather than "needs". No one needs a garden. No one needs to live within a mile of the station. No one needs a spare bedroom. No one needs off street parking. My partner and I could have a 2 bedroom flat that perfectly fulfils our needs. Go to any poorer country and you will realise that the idea of need is completely arbitrary. People say they need a big Chelsea tractor because they are having a kid. Of course they don't. People have been having 3 kids and stuffing them into a 2CV for years. Its almost entirely want and convenience. Thats fine. If you can afford to indulge that then crack on, we certainly have. You can't argue that people are buying the only house/flat they can afford when they are making these choices though.

I think you are considering needs and wants very black and white. Its shades of grey, some wants are far more reasonable (objectively speaking) than other wants.

Yes, critisice people who have chased the high life (the 4x4 for school example) but its not reasonable to criticise someone in a modest 3 bed semi, even if they technically could survive in a 1 bed studio flat.

 

[Kill_Phil]

Kind of agree.

Need.
If you define need as "survive" all you need is a 1 bed flat.

You might need parking for a job you travel far too. But you don't need much else. Me and my partner rented a 1 bed flat and it was livable. But only just. It was taking its toll.

Add work from home and you probably need 2 bed for 2 people.

But really, for 2 people, you don't need:
Garden.
3 bed,
Detached,
Drive,
Garage,
Nice area,
Etc

Why stop there. If we're basing on what is needed to 'survive' why don't we all go back to living in caves. God forbid people for aiming to better theirs and their families lives...

 

[413x]

Why stop there. If we're basing on what is needed to 'survive' why don't we all go back to living in caves. God forbid people for aiming to better theirs and their families lives...

The point was need, if you don't have enough for 200+ there are options much lower. (around here).
It's not whether it's right or wrong.

It's impossible for everyone to have everything. There simply wouldn't be the space for everyone to have a 3 bed detached.


Most people in the middle or lower have to compromise.

If you can't/won't move geographically you get really hammered.

 

[danlightbulb]

It's impossible for everyone to have everything. There simply wouldn't be the space for everyone to have a 3 bed detached.

It also wouldn't be possible for everyone to decide to cut their cloth and buy the cheapest house - because what would happen is the cheapest house would be in demand and wouldn't be the cheapest house any more.

I agree that some people have overstretched. My overall point though is that for most people, really the price they pay is driven by whats available and there isn't really (if you think practically about it) a lot of opportunity to buy cheaper, at least not without sacrificing some pretty serious quality of life things.

 

[413x]

It also wouldn't be possible for everyone to decide to cut their cloth and buy the cheapest house - because what would happen is the cheapest house would be in demand and wouldn't be the cheapest house any more.

I agree that some people have overstretched. My overall point though is that for most people, really the price they pay is driven by whats available and there isn't really (if you think practically about it) a lot of opportunity to buy cheaper, at least not without sacrificing some pretty serious quality of life things.

Oh I agree.
I had a list of core requirements.
And a ranked list of what to chop.

In end chopped 'nicer area' and 'conservatory'. But managed to get everything else.


But I built my list around things I knew were kind of in my budget.

If I had 500k let's say my core list would have been everything and more. And I'd be in same position.


It's easy to see 'core' as what you can nearly afford I think. My parents for example would cringe at living where I do. Where as a FTB might think it amazing.

We overstretched to get the garden. By over stretched I mean that had we bought now, I'd have absolutely gone for a 5 year fix. Which would have helped a lot. But I'd be vulnerable to a crash

 

[Mercenary Keyboard Warrior]

It also wouldn't be possible for everyone to decide to cut their cloth and buy the cheapest house - because what would happen is the cheapest house would be in demand and wouldn't be the cheapest house any more.

I agree that some people have overstretched. My overall point though is that for most people, really the price they pay is driven by whats available and there isn't really (if you think practically about it) a lot of opportunity to buy cheaper, at least not without sacrificing some pretty serious quality of life things.

Its never been any different, people will compete for whats there, those with most money will get whats best, and ripple down to the worst properties for the poorest.
Everyone cannot have a mansion. Unless of course we flatten everything, build every mansion equally and then everyone will get a mansion. But some will still be worth more than others due to location etc

 

[fez]

I think you are considering needs and wants very black and white. Its shades of grey, some wants are far more reasonable (objectively speaking) than other wants.

Yes, critisice people who have chased the high life (the 4x4 for school example) but its not reasonable to criticise someone in a modest 3 bed semi, even if they technically could survive in a 1 bed studio flat.

I'm considering needs as needs. Thats the very point of them. You can argue until the cows come home about wants but when it comes to needs, even if you are being quite generous, most people are buying far above "needs".

This is where we are differing. I'm not arguing against people buying whatever they want and can afford. What I am saying is that you shouldn't stretch yourself so much that when you need to find another £5k a year you suddenly cannot afford your mortgage because you decided that you needed a 3 bedroom house with a garden in a nicer areas instead of a 2 bedroom house with a garden in a nicer area. Those were choices you made and the consequences of choosing those extra luxuries is on you.

 

[IvanDobskey]

You should always aim for as nice a house as you can reasonably afford. But it is your responsibility to make sure there is some wiggle room if costs go up.

We could have gone for a 400k house, but decided to play it a little safer, in case the exact current scenario came about.

 

[Mercenary Keyboard Warrior]

Oh I agree.
I had a list of core requirements.
And a ranked list of what to chop.

In end chopped 'nicer area' and 'conservatory'. But managed to get everything else.


But I built my list around things I knew were kind of in my budget.

If I had 500k let's say my core list would have been everything and more. And I'd be in same position.


It's easy to see 'core' as what you can nearly afford I think. My parents for example would cringe at living where I do. Where as a FTB might think it amazing.

We overstretched to get the garden. By over stretched I mean that had we bought now, I'd have absolutely gone for a 5 year fix. Which would have helped a lot. But I'd be vulnerable to a crash

Exactly.
Most people, the vast majority, probably 99% have to make sacrifices on what they get.
I mean location, size, rooms, outside space, garages, driveways, distance to neighbours, gas/electric, other services, crime, job opportunities, road access

So many factors people are taking into account. Pretty much all of which fall under wants not needs.

Otherwise I will take a central london mansion with a couple of acres for £100k please (This doesn't even exist outside buckingham palace)

My first house was a 2 up 2 down, literally. It had been extended (2 storey) at some point to add a kitchen and bathroom, but until that point it was 4 rooms with fireplaces and that was it.
I suspect early on it had more than 1 family living there, it was attached to a pretty large house and we believe the house we had was for people who worked for the main house. It was pretty old 1890s

Oh it had a nasty cellar as well. We believe this was where the coal for the main house was delivered as that didnt have a cellar

 

[danlightbulb]

most people are buying far above "needs".

I would say most first time buyers aren't, that's my point. You're probably right when considering home movers. Im focussed on FTB because they are the ones likely to be most stretched and vulnerable to having massive recent mortgages.

Its unreasonable to set the bar on need at a 1 bed flat and everything else is indulgence. Like was said above, where do you stop. Cars are important, parking is important. That is not me just saying so, it is quantifiably objectively important. Problem is many houses don't have it, that is a problem with the housing stock quality not the needs/wants of people.

What I am saying is that you shouldn't stretch yourself so much that when you need to find another £5k a year you suddenly cannot afford your mortgage because you decided that you needed a 3 bedroom house with a garden in a nicer areas instead of a 2 bedroom house with a garden in a nicer area. Those were choices you made and the consequences of choosing those extra luxuries is on you.

Ok. I still argue that at the lower end of FTB range there is a rather stark quality boundary that you cross through if you drop budget too low and so it is unreasonable to suggest those people should have bought cheaper.

 

[413x]

Exactly.
Most people, the vast majority, probably 99% have to make sacrifices on what they get.
I mean location, size, rooms, outside space, garages, driveways, distance to neighbours, gas/electric, other services, crime, job opportunities, road access

So many factors people are taking into account. Pretty much all of which fall under wants not needs.

Otherwise I will take a central london mansion with a couple of acres for £100k please (This doesn't even exist outside buckingham palace)

My first house was a 2 up 2 down, literally. It had been extended (2 storey) at some point to add a kitchen and bathroom, but until that point it was 4 rooms with fireplaces and that was it.
I suspect early on it had more than 1 family living there, it was attached to a pretty large house and we believe the house we had was for people who worked for the main house. It was pretty old 1890s

Oh it had a nasty cellar as well. We believe this was where the coal for the main house was delivered as that didnt have a cellar

I think you kind of have an idea you build as you start to think about buying. You build that idea on roughly what you think you can get. You'll then search around your list of wants. And some of them will be 'needs'.

Garden was my big one. Because I knew my savings/earning could get it.

If I earnt 10k less. That wouldn't even enter the list as it was dream territory.

Each person's "needs" are based on thier salary/savings etc. But true needs? Very very different.

 

[Mercenary Keyboard Warrior]

I would say most first time buyers aren't, that's my point. You're probably right when considering home movers. Im focussed on FTB because they are the ones likely to be most stretched and vulnerable to having massive recent mortgages.

Its unreasonable to set the bar on need at a 1 bed flat and everything else is indulgence. Like was said above, where do you stop. Cars are important, parking is important. That is not me just saying so, it is quantifiably objectively important. Problem is many houses don't have it, that is a problem with the housing stock quality not the needs/wants of people.


Ok. I still argue that at the lower end of FTB range there is a rather stark boundary that you cross through if you drop budget too low and so it is unreasonable to suggest people should have bought cheaper.

Exactly its a housing stock problem which coincides with its pretty much always been the same.

Unlike what many seem to think now its never been easy to buy a first property. It was probably relatively easier at times, but its by no means always been a walk in the park.
In many ways now your more likely to see it easier to survive as there is actually a better support network in place now that there used to be.
Its a massive stain on the country that it exists, but if you fall on hardship now lenders are more responsible, things like food banks whilst being horrible to have to rely on didnt exist when people used to fall on hard times etc.
Things always change, and yet much stays the same, its just not quite the same standards as it once was.

 

[Lima]

Are you fixing in for 10? How long do you have left? Any option for a 5?

I have about 27 years left. Aim being to over pay chunks off and shorten if possible (less likely now!). There is an option for 5 which I will strongly consider, but whilst I don’t think rates will go bonkers for a full 10 years, I can see them going higher than people would like over the next 1-3 years then cooling off but to a ‘new’ low level of slightly above where we are currently at. I do not buy what that quote from the BoE bloke says…. Ukraine situation isnt going to improve for a long time.

 

[Scam]

But its near impossible to control.

It is, but mainly because of landlordism. Homes here are seen as investments. The more expensive they are, the better for landlords because it stops other people getting on the ladder, stops people being able to buy - so they are forced to rent. Which means they can command whatever rent they want. So not-only can they charge extortionate rents, but their assets increase in price as well over time. It's pretty disgusting if you think about it. A roof over your head is a basic human right, yet here it is seen as something to make money out of.

 

[kona786]

Especially when you factor in taking a 5 year and having to renew in 5 years costs 1000 in valuation/legal fees which you don't have to pay.

It's a remortgage, with no extra being borrowed and staying in the same property?

If so there are no valuation or legal fees. A product fee at most?

 

[kona786]

I’ve got two mortgages on my property (one at 35% one at 65% of the outstanding balance), one fix runs out in March next year and the other in August next year.
I know this is a better question for the bank, but will I be able to move one of these to a different bank, or will I need to wait for both to be up to do that?

I assume I can’t move one portion and not the other but curious if anyone has been in this position.

I'm 99% sure you can't split the mortgage with more than one lender.

 

[413x]

It's a remortgage, with no extra being borrowed and staying in the same property?

If so there are no valuation or legal fees. A product fee at most?

The product fee covers the legal/valuation etc. Conveyancing is still done, sometimes a proper valuation too.

It's still significant. Usually 1k?
It was 1k for me.

That's a lot when interest otherwise is 1-2 pounds a day.