Mortgage Rate Rises

IMO what we need is house price stability.
With an active government strategy of tying to keep average houses at a set level of affordability and avoid excessive house price inflation by stepping in to ensure supply if house builders dont.
(Watch those house builders build if they think they will lose their monopoly), even more so if compulsory purchase for eg plots of land with permission about to expire is enforced.

I cannot imagine we would see a government in the UK of any colour with the balls to do something like that.
Sounds very command economy right, also sounds like a strong foundation for affordable housing that would not erode our competitive advantages like excess pay demands do ;)
 
jaybee said:
Interesting. Is that because of nimbyism and opposing pressure for the developments to go ahead at all?

Forgive me for not crying a river for these developers profiting from what they call houses. From my perspective and experience, a lot of new builds are dog **** in quality and layout of the estates are poor. Houses are crammed in and knocked up quickly to maximise profit. Tiny rear gardens all overlooked. Minimal front gardens and a massive lack of drive space/parking. Lovely brick built roads are too narrow and get littered with cars and work vans along the entire roads around the estates. I know someone close to me who just bought a brand new 700k house. All 3 of the bathrooms had major leaks causing damage, as did many others down the same road. Several other issues. To be expected? Only because we accept this BS in the UK when our rip off houses get signed off as adequate.
Seen the Welsh guy on tiktok/youtube who does snagging? "Absolutely shocking" is his catchphrase. The guy finds some incredible stuff. Structurally lethal stuff. Absolute shambles.

There is no pride in workmanship anymore in many things in the UK. It's all about getting the job done as quick as possible to a level deemed adequate and then laugh all the way to the bank.
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Problem is a lot of what your complaining about here is government policy (both local and national)

The local for example sets the density ratios for new developments (over 9 houses I believe) and hence the developers HAVE to build houses crammed together.
National government policy is to NOT build "excessive" parking in order to promote using public transport. LOL!
If you want a large noncrammed together with a decent garden you end up having to go with a small developer since they get away with not having to comply with the local planning (to the same extent).

Poor build quality, IMO its always been the case. I have lived in a 1890s up to a 2009 house, I saw problems in all of them. Just different problems.
The simplest and best way to be build better houses would be to make as much as possible in a factory environment with standards and inspections. (It would actually be cheaper as well)
 
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There will always be snagging issues on a new house regardless of the cost/effort involved to build simply due to the fact of all these items and trades having to come together.
IMO the main reason new builds seem cheap these days compared to houses from 60s etc is the rise of timber framed houses where internal walls are just plaster compared to the solid walls of houses of old. (My house has stone bricks as internal walls)
I work in the trade as a sub contractor for these big house builders. They certainly have reigned back a bit with the pace of developments but are still building. They are cautious of being caught with a load of completed houses with no one to sell to.
 
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jaybee said:
Interesting. Is that because of nimbyism and opposing pressure for the developments to go ahead at all?

Forgive me for not crying a river for these developers profiting from what they call houses. From my perspective and experience, a lot of new builds are dog **** in quality and layout of the estates are poor. Houses are crammed in and knocked up quickly to maximise profit. Tiny rear gardens all overlooked. Minimal front gardens and a massive lack of drive space/parking. Lovely brick built roads are too narrow and get littered with cars and work vans along the entire roads around the estates. I know someone close to me who just bought a brand new 700k house. All 3 of the bathrooms had major leaks causing damage, as did many others down the same road. Several other issues. To be expected? Only because we accept this BS in the UK when our rip off houses get signed off as adequate.
Seen the Welsh guy on tiktok/youtube who does snagging? "Absolutely shocking" is his catchphrase. The guy finds some incredible stuff. Structurally lethal stuff. Absolute shambles.

There is no pride in workmanship anymore in many things in the UK. It's all about getting the job done as quick as possible to a level deemed adequate and then laugh all the way to the bank.
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There is more to it than just the builders trying to maximise profits, though the quality of new builds can be laid at their feet, the cost of land can sometimes dictate construction method in order to make projects viable - but obviously there's no excuse for poor quality and poor handling of snagging.

Also worth thinking about the banks in all this - they will approve your mortgage based on the market value for a property - they won't really care if it's a proper brick built home, or if it has a timber frame, so if a "properly" built house increases the cost by say 20% that doesn't necessarily mean that buyers can afford the premium. "Premium" quality homes are built in the UK - typically by smaller firms, but those aren't normally your typical 3 bed semi, there more in the "executive" homes type space, there are obviously exceptions though.

On the roads, parking and small garden front - developers do not share all the blame here. Local planning departments have a big role in this aspect - but again there are exceptions where the builder is trying to maximise the density and cost of a development. Again the lenders also have an influence here - when agreeing a mortgage those focus on the size of the house - not so much on the parking/road/garden.

There are some big house builders laughing all the way to the bank - but there are lot of firms that aren't. Doing a big development is a risky venture, unless you can sell a large percentage of the homes off plan before you start incurring significant build, material and land costs - cashflow is a serious issue for many firms, which is probably only going to get worse over the next few years due to inflationary pressure on building materials, lack of trained staff due to Brexit/cost of living - both increasing labour costs, and, an increase in the costs to borrow the money needed to get a development through to completion thanks to the interest rate rises.

It's easy to dislike developers - and a lot of them really do deserve it. But like most things - there's often a lot more to it than meets the eye.
 
krooton said:
Tbh, I think tax-relief on mortgages and rent would be good, shelter is a basic necessity after all.
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Making lending cheaper doesn't make housing cheaper as we've seen several examples of over the last 3 years.
People just end up paying more for the property because housing stock is so limited.

You have to address the supply / demand balance or introduce market controls (which no one will do).
 
Kamakazie! said:
Making lending cheaper doesn't make housing cheaper as we've seen several examples of over the last 3 years.
People just end up paying more for the property because housing stock is so limited.

You have to address the supply / demand balance or introduce market controls (which no one will do).
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I followed this up to explain that it shouldn't impact the amount that you can lend, just how you pay back your debt.
 
EvilRob said:
Still encourages everyone to constantly borrow to their maximum ratio.
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Hell, could even force a lower multiplier, but I think that is totally down to the lender to decide.

I just think that a system that makes rent/mortgage payments salary sacrifices would help a lot of people, especially if coupled with rent controls for renters so landlords don't just try to frontload more.
 
If they forced a lower multiplier they'd have to curtail investors.

I actually agree with a lower lending multiplier figure. It would be less risky when rates moon.
But if you let the rich suck up the stock , the average person will just be hurt more.
 
krooton said:
Hell, could even force a lower multiplier, but I think that is totally down to the lender to decide.

I just think that a system that makes rent/mortgage payments salary sacrifices would help a lot of people, especially if coupled with rent controls for renters so landlords don't just try to frontload more.
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Limiting the borrowing of people who need a mortgage to purchase beyond affordability doesn't seem very desirable and would likely have unintended consequences.
Anyway eventually anything that leads to people having ability to pay more for property will just drive up prices one way or another if supply remains the same.
Example: we're currently at about 1.2x multiplier. If I can write off the interest for tax purposes, even if you lower the multiplier to 2.5 I will be highly motivated to borrow to 2.5 and move to a more expensive place.
The only fix worth talking about until supply is addressed is supply itself.
 
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jaybee said:
Interesting. Is that because of nimbyism and opposing pressure for the developments to go ahead at all?
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Some of that but it's mostly just standard planning cycles and phased builds. There's a lot more to building houses than just building houses, if that makes sense - roads, schools, community centres, playparks, green spaces and all the legislation associated with these. To put things in context a primary school here (part of the design for a new local development) was opened 3 years later than originally planned. Similarly some of the roads are several years late in construction. The planning horizon for these developments can easily stretch to a decade.
 
House quality would be a lot better if people maintained the properties that they live in. I know so many having viewed a lot over the years where nothing has been done for 10, 20, 30 years or more. Old heating systems, damp patches through condensation, lack of insulation. People who own houses should spend some money or time doing repairs or maintenance. Even cleaning FFS.
 
JamesH85 said:
Steadily rising towards 6% for 2 year deals. Feel like the mortgage situation is in an awful place. Could be looking at 5.5% fixed rates for 5 years soon.
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If they keep raising rates to quell inflation. But inflation is now very much on essentials (especially basic food) it's not going to be affected by these rates.

But it will do untold damage as more and more goes onto peoples mortgages/rent, I food and energy.


Real fear is winter. Utility prices have been the saviour to get that inflation below 10pc but if they pick up in winter that inflation is going to be stubborn at maybe even higher than now.



Not sure about future of food. But I haven't heard, read or seen anything that hints at food prices coming down anytime soon.

The blunt tool of base rate increases is looking more ineffective every month.
 
Hagar said:
House quality would be a lot better if people maintained the properties that they live in. I know so many having viewed a lot over the years where nothing has been done for 10, 20, 30 years or more. Old heating systems, damp patches through condensation, lack of insulation. People who own houses should spend some money or time doing repairs or maintenance. Even cleaning FFS.
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But it's not worth it. It doesn't do enough for the house price. For us it's particularly bad.
Our boiler is ancient, our windows leak like a sieve. But it's a only ever planned to be a 5 year home. Even more since covid, cost of these major works is never going to get a return.
Same goes for stuff like solar. Unless there's clear evidence these things bump. Up the house price, people can't/won't commit.

So all these starter and middle step homes just get no attention. Where the forever homes do.
 
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413x said:
But it's not worth it. It doesn't do enough for the house price. For us it's particularly bad.
Our boiler is ancient, our windows leak like a sieve. But it's a only ever planned to be a 5 year home. Even more since covid, cost of these major works is never going to get a return.
Same goes for stuff like solar. Unless there's clear evidence these things bump. Up the house price, people can't/won't commit.

So all these starter and middle step homes just get no attention. Where the forever homes do.
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Starter and middle step home will be the forever homes if these rates continue. And even if they don't, houses are just too expensive now. People should fix and look after their houses instead of kicking the can down the road.
 
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