If you buy at the right time this tactic pays off big time and your wealth is amplified. Wrong time and you might become homeless. It's rough. Personally I regret borrowing to what was sensible on my current income and wish I'd stretched a bit more and taken a bigger bet on career growth and inflation. As always, hindsight is 20/20 and at least I now have a very affordable mortgage.
Hasn’t happened local to me, sales are still being agreed right at the same ridiculous prices. Same thing happened in 2008 prices just stopped rising for a couple of years. If anything my local market is still trickling up due to a lack of houses on the market.
10 years is a long time. Pay off a lump sum when fix rate ends reduces long term costs, that including any any fees v interest.
I fixed for 30 years at 2.5%, and have no intention of paying it back any sooner than I need to. It's a very cheap mortgage and my wife and I can very early afford the payments. We could put any overpayments into a high yield savings account and make nearly double the mortgage interest rate while keeping the cash liquid.
What do you mean by this?
www.bankofengland.co.uk
At least 2 of friends who are cashing out and moving up North are selling to Americans. They earn more, have more disposable income and are looking to snap up bargains.
So many things can happen in that time, that could make you hit your savings. But then again it is your choice, for the average person savings to equalise mortgage interest takes a long time.
It is a long time, but again you don't know his circumstances - what if he'd fixed for 10 years at 1%? That's a better position to be in than having to negotiate a deal now, also with the option of over payments you're helping reduce that interest deficit. So I stand by my original statement - what an odd comment to make
Localised area of Sheffield and the data is actual agreed sale prices that are in the process of completing (I know a few people including myself in the process of selling) we were not expecting to get anything like the level of interest or volume/level of offers we got given all the talk of house price falls which I think probably played into our hands as people are afraid of selling at the minute which is reducing supply and hence maintaining demand/prices.All regions will vary dramatically of course, and very good properties will always sell, even throughout significant downturns.
But out of interest, can I ask what region you're referring to and what data you’ve based this upon? I would be genuinely interested to know.
All of the data that I’ve seen from the large indexes that track actual transaction prices seem to be showing varying levels of small decrease, depending upon the region, pretty much across the board over the last 3-6 months.
Given that the effects of the recent rises to interest rates will only really start feeding in to the data over the next few quarters, I genuinely would be interested to understand why so many people think it’s going to be any different this time to previous similar situations historically.
In general, my view is that I wouldn't be surprised if we end up seeing a near total unwinding of the Covid bubble, slowly over the next 2-3 years, possibly a bit more peak to trough if we actually do hit 6% rates; with the worst effected properties being the ones that gained the most over the last three years. Which incidentally, pretty much aligns with the kind of potential house price decline range predicted by the BOE's 6% interest rate stress test that they conducted last year.
Just in case anyone is interested:
Stress testing the UK banking system: key elements of the 2022/23 annual cyclical scenario
The 2022/23 stress test will assess the resilience of the UK banking system to deep simultaneous recessions in the UK and global economies, large falls in asset prices and higher global interest rates, and a separate stress of misconduct costs.
COVID should have seen a drop but the governments ridiculously short sighted stamp duty cuts turned the heat up massively under the market, nobody saved any money as prices just jumped by the amount of the reduction in Tax in fact I'd say the Tax man was by far the biggest looser from that broken policy! The government still hasn't done the one thing I would like to see with stamp duty which is reduce it massively for older people downsizing as this could potentially free up a lot of larger family homes, I know loads of older people who won't even consider moving as they would have to give the government a massive chunk of tax.
