Lol point to the post where I said 20%, I simply said equating todays rates with those in the 80’s is silly due to house prices, debt sizes and amount of income spent on accommodation (be it rent or mortgage repayment)
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Mortgage Rate Rises
- Thread starter glenimp617
- Start date
You are right, my bad. It was another poster being erroneous. Apologies.
Is that all you've got "I don't believe the evidence you put before me" no countering evidence? Just a refusal to believe something that has been discussed (and numerous articles posted) since this raise in interest rates started?
And just lol at a Brexiteer now wanting "expert" opinion, while dismissing people in the relevant field
You've had the affordability graphs, avg house price to income graphs, wage stagnation graphs.
It really doesn't take much brainpower to work out that when houses were 4x avg salary and they're now 10x avg salary, that the (un)affordability of the mortgage repayments are going to scale at a much faster rate with smaller interest rate rises
A long twitter thread explaining it again for the nth time.
Soldato
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it is unfortunate... and I don't really know what the answer is to stop spiralling house prices. the way we are going it will be like countries like Germany soon... there as I understand it the basic expectation is you rent most of your life until a family member leaves you a home in their will.
(note no stats to support that it's just what my mate who is German tells me). Only about half of adult Germans own a home, most middle aged and below rent.
it sucks!.
OTOH the low interest rates of the last decade or so also suck for everything other than house buying . there was absolutely no incentive to save money, as anything saved just devalued thanks to inflation (which it is doing worse than ever now).
maybe interest rates going up will force a house price crash. will be devastating for those who are on the edge now, but maybe long term will make houses affordable again for more people (I don't know just spitballing)
I do know if I didn't have a house now, my fear of debt is such that I would not even contemplate getting on the ladder now, it's just to daunting esp where I live.
(note no stats to support that it's just what my mate who is German tells me). Only about half of adult Germans own a home, most middle aged and below rent.
it sucks!.
OTOH the low interest rates of the last decade or so also suck for everything other than house buying . there was absolutely no incentive to save money, as anything saved just devalued thanks to inflation (which it is doing worse than ever now).
maybe interest rates going up will force a house price crash. will be devastating for those who are on the edge now, but maybe long term will make houses affordable again for more people (I don't know just spitballing)
I do know if I didn't have a house now, my fear of debt is such that I would not even contemplate getting on the ladder now, it's just to daunting esp where I live.
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Actually No. Average wages in today's minimum living wage society supported by in work tax credits, nursery places et al, et al are a hugely different sum to a place where there was no lower floor to earnings. Likewise income and disposable income varied massively north to south. These analysts with I suppose mainframe computer access who can say definitively what a person's experience working a lowish paid job and buying a house was like compared with today is making huge generalisations. And selling papers.
Associate
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Another useless thread full of "experts".
And when they're not in this thread expertly telling us that base rates will only hit 4.25%, and that 4% today is the equivalent of 20% in the 80's, they're in the Nicola Bulley thread telling us exactly what happened.
And when they're not in this thread expertly telling us that base rates will only hit 4.25%, and that 4% today is the equivalent of 20% in the 80's, they're in the Nicola Bulley thread telling us exactly what happened.
I don’t think anyone is saying anything about the definitive lived experience of an individual, after all that is basically impossible with a numbers based comparative but I think it’s pretty basic maths that the current house prices, debt levels and percentage of income spent on accommodation make the statement ‘but rates were much higher in the 70’s/80’s’ nonsense. In the 80’s a family with a single reasonable income and three kids could afford a nice house something which simply isn’t possible for most anymore!
It's really obvious that 4pc today isn't the same pain as 4pc 15 years ago.
You can point to all the benefits now but those buying houses aren't really using those.
We are talking about home owners. If you don't want to look at numbers. Because you don't trust them. Just think what 10pc would do now. It would be ruinous. The country would fall apart. The older lot always point to surviving 15pc or whatever number. Its obvious to anyone even half that would be devastating today.
You can't really argue this.
You can point to all the benefits now but those buying houses aren't really using those.
We are talking about home owners. If you don't want to look at numbers. Because you don't trust them. Just think what 10pc would do now. It would be ruinous. The country would fall apart. The older lot always point to surviving 15pc or whatever number. Its obvious to anyone even half that would be devastating today.
You can't really argue this.
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The government would argue that people in the 1980s didn't have netflix subscriptions. Just think what kind of a house you could buy with that £15.99 a month saving.
Mortgage data showed the market has come back to life. The number of mortgages has risen back to August levels and climbing. https://12ft.io/proxy?q=https://www...rs-number-mortgage-deals-hits-six-month-high/
UK avoiding recession or having a shallow recession at worst. Interest rates are falling and there are now fixed rates below the base rate. I don’t expect to see rates anything like they were pre mini budget last year but the market is recovering strongly.
UK avoiding recession or having a shallow recession at worst. Interest rates are falling and there are now fixed rates below the base rate. I don’t expect to see rates anything like they were pre mini budget last year but the market is recovering strongly.
I don't think buying a house was the majority thing here was it, before Thatcher? A lot of people were more than happy enough in a council house,paying a reasonable rent.
The country really needs a mass social house building programme, millions of cheap houses / flats to rent but obviously that's never going to happen now.
Too much money to be made screwing people over.
Renting for life would be fine if you knew you'd get state support later on. But with NHS creaking and state pension dwindling not having a house paid off by time you are retirement age is just going to mean you probably don't ever retire.
I agree. I dont see rates dropping below 3.5%.... I would think that would be the absolute minimum for fixed rates with low LTV.
I'd imagine a FTB with 90% LTV will be looking at 4.5% - 5% as the new standard
What's your definition of 'devastating'? I started responding that I wasn't convinced 7.5% would mean that, but then I realised it's a bit subjective.
I can't easily find stats before 1980 but that was early days of Thatcher so due to inertia it can't have shifted much in a year, back then it was 56.6% owner occupier so it is reasonable to assume this number was >50% (i.e. the majority) before Thatcher came to power in 1979.
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If base rate hit 7.5 mortgage rates would be 9ish percent.
It would be bad. Amount of repossessions would be incredibly high, house prices would collapse. It would be carnage.
Would be game over for me for sure. Too late to start again at 40 as well that's the real ball breaker.
(above I'm assuming 9pc lasts a decent amount of time)
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I expect a lot of people have low LTV these days due to the huge gains they've made on their properties, so it might be less than a 1.5% markup. Unlike 15 years ago there should be fewer plunged into negative equity and hence unable to remortgage away from SVR.
I'd be surprised if there was a sustained period of 9%. Right now, interest rates have needed to rise to combat inflation but inflation is likely to tail off simply because it's an annual rate of change and the price rises of a year ago start falling off the charts.
With rates at 4% now presuambly the '+3% affordability stress test' or whatever it's called should be checking if people taking out new mortgages could handle a 7% base rate.
Unemployment remains low, to me it looks more like a 2008 situation than early 90s, and it was the latter not the former that was bad for repossessions (repossessions per year didn't even hit 50k in the last 'crash').
I'd be surprised if there was a sustained period of 9%. Right now, interest rates have needed to rise to combat inflation but inflation is likely to tail off simply because it's an annual rate of change and the price rises of a year ago start falling off the charts.
With rates at 4% now presuambly the '+3% affordability stress test' or whatever it's called should be checking if people taking out new mortgages could handle a 7% base rate.
Unemployment remains low, to me it looks more like a 2008 situation than early 90s, and it was the latter not the former that was bad for repossessions (repossessions per year didn't even hit 50k in the last 'crash').
No I don't think it will either. Fair few months ago it seemed that 4-5pc would be the peak. And it looks like that is what is transpiring.
There will likely be a few on 5pc deals who were cautious and took out a fix at the peak. But not many.
It wouldn't be an issue if rest of cost of living wasn't so high. Quite fortunate it didn't get worse.
That was scrapped last year, ironically at the time it's been most pertinent but conversely would have probably stopped more people being able to get a mortgage.
Although inflation is likely to come down as it starts measuring against the previous year, it won't help people until wages catch back up as it's not as if prices will come back down just because inflation is lower... All it means is they are rising slower.
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If we are all still here by then, I think the NHS will have long gone private