Mortgage Rate Rises

Mercenary Keyboard Warrior said:
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.

Financial YearEngland
2005 to 20061,209,080
2006 to 20071,433,200
2007 to 20081,256,540
2008 to 2009664,250
2009 to 2010770,600
2010 to 2011755,160
2011 to 2012794,170
2012 to 2013799,620
2013 to 2014977,510
2014 to 20151,033,880
2015 to 20161,143,560
2016 to 2017985,630
2017 to 20181,024,850
2018 to 20191,003,060
2019 to 2020988,970
2020 to 20211,014,070
2021 to 20221,166,510
Click to expand...
Precisely. Volumes always drop hugely in times of uncertainty. A very large proportion of those sales numbers are cash buyers too.
 
Interesting comment from Gordon Brown:

It’s all there in Britannia Unchained, co-authored by Liz Truss and Kwarteng: the pound can collapse, borrowing and mortgages can soar, pensioners can freeze, kids can go hungry, as long as the economy is ripe for venture capitalists freed from regulation and, ideally, tax.
 
Mercenary Keyboard Warrior said:
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.

Financial YearEngland
2005 to 20061,209,080
2006 to 20071,433,200
2007 to 20081,256,540
2008 to 2009664,250
2009 to 2010770,600
2010 to 2011755,160
2011 to 2012794,170
2012 to 2013799,620
2013 to 2014977,510
2014 to 20151,033,880
2015 to 20161,143,560
2016 to 2017985,630
2017 to 20181,024,850
2018 to 20191,003,060
2019 to 2020988,970
2020 to 20211,014,070
2021 to 20221,166,510
Click to expand...

Ooh, good chart!

Clearly shows the 2007 house price crash, the brexit vote and the start of covid.

Interesting that volumes have not recovered to mid-2000s levels yet.
 
squerble said:
Having watched PMQs, Liz Truss could not give two hoots about homeowners or prospective homeowners.
Click to expand...
She really does make my skin crawl. Every decision she makes has me shaking my head. She is everything I despise about the conservative mantra and nothing of the agreeable bits!
 
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