Mortgage Rate Rises

413x · 3 Nov 2022 at 10:14

Uther said:
Houses should drop 50% really, to make them any way affordable for most people. That'll never happen though, the country would implode.

Ha, I'd just declare bankruptcy now and be done with it!

smokedog · 3 Nov 2022 at 10:16

200sols said:
I'd like to see 1% today.

BoE wouldn't have the minerals, it will be 0.75

wildman · 3 Nov 2022 at 10:19

smokedog said:
BoE wouldn't have the minerals, it will be 0.75

not sure if they even have the stones for 0.75

i reckon 0.5

Uther · 3 Nov 2022 at 10:19

413x said:
Ha, I'd just declare bankruptcy now and be done with it!

Yes, it would screw up a lot of people, but house prices are in a completely mental place now. Look at that chart posted earlier. Twenty years ago a 2 bed semi with a garage in my not awful village near Stratford on Avon was 52k, those same houses are well over 250k now...

Uther · 3 Nov 2022 at 10:20

wildman said:
not sure if they even have the stones for 0.75

i reckon 0.5

Yeah they've always been behind the curve. I reckon at most they'll match the feds rise.

Felon · 3 Nov 2022 at 10:26

Haggisman said:
What are you classing as a "normal house" and "the Midlands", because to get to your quoted £1.8-£2k/month, that's a £450k house @ 6% with 10% deposit on a 30 year term

Not sure how you're getting those figures, £450k works out at a lot more. (Interest only, is still more than £2k a month)

neocon · 3 Nov 2022 at 10:31

413x said:
Ha, I'd just declare bankruptcy now and be done with it!

Imagine how poor that'd make the UK? £9T down to £4.5T

Value of British homes now £9.2 trillion – four times greater than UK GDP

The country’s 11.9 million homes have increased in value by an average of £49,000 since 2016

thenegotiator.co.uk

413x · 3 Nov 2022 at 10:40

Uther said:
Yes, it would screw up a lot of people, but house prices are in a completely mental place now. Look at that chart posted earlier. Twenty years ago a 2 bed semi with a garage in my not awful village near Stratford on Avon was 52k, those same houses are well over 250k now...

Without some impossible to create mechanism that artificially controls house prices it will never drop 50pc as so little supply and it would cross into investor snapping up territory.

I agree though, I think most of us do, house prices are too high. A few pc rise in mortgages should never be so crippling.

We've let houses go too far into commodity territory rather than a homes.

Haggisman · 3 Nov 2022 at 10:45

Screeeech said:
Not sure how you're getting those figures, £450k works out at a lot more. (Interest only, is still more than £2k a month)

Strange, was using the same calculator and it was showing ~£1.9k with those same figures, maybe it didn't recalculate properly when I changed one of the values (it seems to have calculated using 4% instead of 6%)

My bad!

neocon · 3 Nov 2022 at 10:46

Housing market is too big to fail

I mean think about £9T compared to the 2008 bailout in terms of scale

Doobedoo · 3 Nov 2022 at 10:48

Makes you wonder how and where they are going to home all these migrants? Not enough houses as it is and who’s going to pay their rent?

robfosters · 3 Nov 2022 at 10:58

Doobedoo said:
Makes you wonder how and where they are going to home all these migrants? Not enough houses as it is and who’s going to pay their rent?

Taxpayers

fez · 3 Nov 2022 at 11:04

neocon said:
Housing market is too big to fail

Its political suicide to let the housing market crash properly.

It just makes zero sense right now. A lot of people would be screwed if it dropped 20% and yet thats pretty much just the increase from the past 3 or so years in a lot of areas.

GordyR · 3 Nov 2022 at 11:22

Doobedoo said:
Makes you wonder how and where they are going to home all these migrants?

Not really. A basic understanding of economics covers it fairly well.

Economies flex with the size of their populations.

More people = More workers = More taxpayers = More money in government coffers.

That then should result in more investment in to infrastructure and ultimately more houses being built.

The piece missing over the last decade or so has been the Government investment and sound economic policy part of the equation.

Obviously the above is grossly oversimplified, but the point is that it's not the fact that working age immigrants come here that is the issue, it's poor policy and economic mismanagement.

Doobedoo said:
Not enough houses as it is and who’s going to pay their rent?

Given that working age migrants are as a group, net contributors and are less expensive to the state than educating and training native born citizens; the answer to your question is that they themselves are.

neocon · 3 Nov 2022 at 11:27

What kind of jobs can channel migrants do in the UK? I'm sure they probably want a job.

smokedog · 3 Nov 2022 at 11:27

fez said:
Its political suicide to let the housing market crash properly.

It just makes zero sense right now. A lot of people would be screwed if it dropped 20% and yet thats pretty much just the increase from the past 3 or so years in a lot of areas.

The drop will not be equal across the board, properties that are overpriced or in less desirable areas will be the ones that suffer the most. The drop is already happening, been keeping an eye on prices in my area (London) and a studio flat listed at £340k last month is now at £290k, that's a 14% drop. But there will be a floor to the drop based on the achievable yield and rentals in my area are a minimum of £1600+ per month.

neocon · 3 Nov 2022 at 11:32

smokedog said:
The drop will not be equal across the board, properties that are overpriced or in less desirable areas will be the ones that suffer the most. The drop is already happening, been keeping an eye on prices in my area (London) and a studio flat listed at £340k last month is now at £290k, that's a 14% drop. But there will be a floor to the drop based on the achievable yield and rentals in my area are a minimum of £1600+ per month.

Is that a drop though, or were the sellers just being unrealistic to begin with?

inferno · 3 Nov 2022 at 11:34

neocon said:
Isn't that what the Philips curve describes

The Phillips Curve Economic Theory Explained

The Phillips curve is an economic theory that inflation and unemployment have a stable and inverse relationship.

www.investopedia.com

I think so. You can’t politely ask people to stop spending, you need to hit them with a sledgehammer and knock them out.

robfosters · 3 Nov 2022 at 11:39

neocon said:
What kind of jobs can channel migrants do in the UK? I'm sure they probably want a job.

Labouring, farm work, picking fruit, fast food workers, Amazon drivers, Uber eats drivers. Unskilled stuff Basically

Doobedoo · 3 Nov 2022 at 11:45

GordyR said:
Not really. A basic understanding of economics covers it fairly well.

Economies flex with the size of their populations.

More people = More workers = More taxpayers = More money in government coffers.

That then should result in more investment in to infrastructure and ultimately more houses being built.

The piece missing over the last decade or so has been the Government investment and sound economic policy part of the equation.

Obviously the above is grossly oversimplified, but the point is that it's not the fact that working age immigrants come here that is the issue, it's poor policy and economic mismanagement.

Given that working age migrants are as a group, net contributors and are less expensive to the state than educating and training native born citizens; the answer to your question is that they themselves are.

What jobs will they be taking? Assuming low paid, low skilled?

We have high rental prices as it is, they will be competing with those already renting or looking to rent.

So where are these houses that are affordable and available for them to rent?