There is a difference between receiving a pension after a working lifetime of sensible, sustainable and supported growth, and having a large portion of that pension contribution age being hit by terrible government policy, management and recession.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Caporegime
Owner with a current LTV of 25% but I bought in the last dip in 2010 so am hoping for another big dip hence why I am in the fortunate position to be mortgage free by 40. I want a double garage and we cannot really extend our single much where we are plus an extra bedroom wouldn't go a miss as my mother lives abroad so when she comes to visit it becomes a bit tight as all three are occupied.
Pre-Covid that upgrade would have cost us 50k, now we are looking 100k+ so I am hoping for a dip. In 2 years time hopefully mortgage will be paid off and rates should start to go back to around 3% again.
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Soldato
Yes, but I wasn't referring to that.
I was disagreeing with the below quote which is why I quoted it in the first place in my post
I don't see that, only seeing 5.24% now and I was using MSE yday to check for rates.
Broker i'm using yesterday was quoting rates of 5.39%.
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Ok you can disagree with that, but everyone's private pensions are going to suffer because of this governments incompetence, wouldn't you say?
Soldato
Of course and, had @purplesky posted as such, I would have agreed but he posted that no-one will get any private pension at all... £0, nada, zilch, diddly squat.
Not going to reply to this directly but will say one word:
Soldato
People say this every time but they are still waiting. We aren’t building anywhere near remotely enough homes to warrant anything close to those numbers. People will always cut back on everything else first plus homeowners aren’t exactly on the lower end of income.
Soldato
Didn't they literally go up 20-30% in the last 2 years? No reason for them not to fall back considering what 's going on now.
Soldato
The problem is during crashes its very hard as a pleb to move unless its cash, even then you can end up in a chain that goes veeeery slowly and can fail due to jobs being lost, people not getting the mortgages they thought they could etc
The rich however can hoover up repos nice and easily since they will borrow (if they even need to) independently from the house(s) they want to purchase.
The real 50/50 is what happens after the crash, a long drawn out recovery which means some chance to pick up a property cheaper if you have come through ok without losing your job etc, or a relatively quick bounce like post 2008.
The rich however can hoover up repos nice and easily since they will borrow (if they even need to) independently from the house(s) they want to purchase.
The real 50/50 is what happens after the crash, a long drawn out recovery which means some chance to pick up a property cheaper if you have come through ok without losing your job etc, or a relatively quick bounce like post 2008.
Soldato
I think 3% mortgage rates will be a thing of the past for an exceedingly long time. If you look at rate history prior to 2008 crash they averaged out at around 5.6% that's from early 90's all the way to 2007. I am not sure we will see the likes of cheap lending as we have experienced for the last 14 years for a long time to come.
Caporegime
Just checked and I fixed at 3.48% on the 28th September. Still waiting for paperwork but I rang Barclays and they have assured me that my rate will be honoured it is just paperwork is now taking up to 20 days! I hope so because now the same 3 year fixed is now 5.76%!!
Soldato
That was people moving around because of WFH etc. Those people aren’t going to be moving again. Quite a few of them were people swapping what they had in the city to somewhere outside to get more for their money and/or reduce/clear their mortgage.
Caporegime
I am just going off our previous experience. We bought in 2010. Our rate then was in the 3-4% region. My brother in law was fixed at 6% as he bought a year earlier. We didn't get the sub 3% till at least 4 years later in 2014. That's why I fixed 3 years as by 2026 I have gambled on rates coming back down or close to 3%. If not then savings will be used to pay off the rest and just get on with life.
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Caporegime
If rates stay above 4% then there can't be anything but a large correction. House prices are higher than ever, wages haven't kept up and inflation is taking money from peoples pockets. There are a huge number of people who won't be able to afford to remortgage in a few years time because they have overextended themselves thinking that interest rates would always be low and their wages would always increase.
If jobs hold up prices will fall. But I don't think it will be a cataclysm.
Like said. Home is usually last thing you give up. Hopefully anyone remortgaging in last year has got on a 5 Yr.
So if you don't lose your job you should be able to afford 5-7pc.
But it will tip some over with other inflationary pressure.
I fully expect to go back to pre covid levels. Maybe a touch over if jobs hold out.
Like said. Home is usually last thing you give up. Hopefully anyone remortgaging in last year has got on a 5 Yr.
So if you don't lose your job you should be able to afford 5-7pc.
But it will tip some over with other inflationary pressure.
I fully expect to go back to pre covid levels. Maybe a touch over if jobs hold out.
Soldato
I dunno, I think if mortgage rates settle around 4% then whilst it will be painful there wont be a massive correction.
Wages will increase so compared to the "fixed" house debt they may increase significantly over the next few years.
People in neg equity (if they fall say 10% or more) will hunker down like they always do, just pay off and sit tight.
People who do want to move will accept lower, but there will be far lower transaction volumes, so whilst prices may appear to have dropped it will be on low volume.
Once things pick up then the prices will jump quickly as a new wave of moves is triggered.
Volumes of houses in England (Wales, Scotland and NI show similar trend). See what happens in a price crash the volume falls, holds, then jumps.
People who don't need to sell don't generally.
Wages will increase so compared to the "fixed" house debt they may increase significantly over the next few years.
People in neg equity (if they fall say 10% or more) will hunker down like they always do, just pay off and sit tight.
People who do want to move will accept lower, but there will be far lower transaction volumes, so whilst prices may appear to have dropped it will be on low volume.
Once things pick up then the prices will jump quickly as a new wave of moves is triggered.
Volumes of houses in England (Wales, Scotland and NI show similar trend). See what happens in a price crash the volume falls, holds, then jumps.
People who don't need to sell don't generally.
| Financial Year | England |
| 2005 to 2006 | 1,209,080 |
| 2006 to 2007 | 1,433,200 |
| 2007 to 2008 | 1,256,540 |
| 2008 to 2009 | 664,250 |
| 2009 to 2010 | 770,600 |
| 2010 to 2011 | 755,160 |
| 2011 to 2012 | 794,170 |
| 2012 to 2013 | 799,620 |
| 2013 to 2014 | 977,510 |
| 2014 to 2015 | 1,033,880 |
| 2015 to 2016 | 1,143,560 |
| 2016 to 2017 | 985,630 |
| 2017 to 2018 | 1,024,850 |
| 2018 to 2019 | 1,003,060 |
| 2019 to 2020 | 988,970 |
| 2020 to 2021 | 1,014,070 |
| 2021 to 2022 | 1,166,510 |
If I lost my current job I'd seriously consider selling and emigrating.
If it settles around 4 I suspect there will be a modest correction in prices. That won't bother many but the high ltv buyers in past year.
Depends if 7pc rates stick around for months.. No real issue. Or year/years.. Huge issues.
Depends if 7pc rates stick around for months.. No real issue. Or year/years.. Huge issues.