Mortgage Rate Rises

[413x]

IMO the issue is not homebuying its the lack of social housing.
I am not against social housing and would support more being built, however I will never support the state (and hence all the population) somehow guaranteeing those doing well enough to be buying a house off the backs of those significantly poorer then themselves who will never get that opportunity.
Buying a house should come with the risks of doing so. If you want the benefits suck up the risk buttercup.

Funny I don't get it because I am a Tory and yet those who criticise in effect want exactly that.

If there was adequate state care when you're no longer able to work it agree with you more. But if you don't have a house, the way things are going you'll have nothing.

I would totally sacrifice house price growth for a safety net for example. Most people will never see the profits from house price growth anyway.

I've mentioned it before. But due to nhs failing and state pensions getting worse, I full expect to have to use the equity in house to fund any resemblance of a retirement.

That's going to probably be the biggest divider between current retirees and the future ones.

 

[danlightbulb]

however I will never support the state (and hence all the population) somehow guaranteeing those doing well enough to be buying a house off the backs of those significantly poorer then themselves who will never get that opportunity.
Buying a house should come with the risks of doing so. If you want the benefits suck up the risk buttercup.

Why shouldn't all groups be looked after? We're not talking about rich stock holders here, were talking normal families either living in a council house or a normal house they've bought.

The people who bear risks should be those taking them, not people just wanting a normal life.

 

[Mercenary Keyboard Warrior]

Raising rates effect mortgage holders significantly more than other groups. A big chunk of people have no mortgage, mostly because they are older and have paid it off. Where is the incentive on those people to dampen their demand?

So rates as a tool is very biased towards mortgage holders, who are expected to take all the pain whilst other groups generate even more money off their savings.

Energy bills effected everyone, that should have dampened demand across everyone left unchecked. But instead they gave out money for that (which I of course also benefited from), which actually will have helped reinforce inflation.

The policies are not working together anyway, so why excessively penalise mortgage holders in this?

Interest rates reduce demand on those with savings by stopping them spending. Its two pronged.

Anyway I am out now since yet again we are into another what benefits Dan scenario. Like the last 20 times or whatever the count is upto now.

 

[Uther]

If there was adequate state care when you're no longer able to work it agree with you more. But if you don't have a house, the way things are going you'll have nothing.

I would totally sacrifice house price growth for a safety net for example. Most people will never see the profits from house price growth anyway.

I've mentioned it before. But due to nhs failing and state pensions getting worse, I full expect to have to use the equity in house to fund any resemblance of a retirement.

That's going to probably be the biggest divider between current retirees and the future ones.

But they'll take the house to pay for care. It seems like you either need to be wealthy enough to not care, or poor enough to not care...
The people in the middle who work hard, manage to buy a house and save but not be wealthy are the ones that are always screwed over.

 

[esmozz]

The problem with MIRAS or something similar as that its kind of self defeating in that if your artificially lowering the rate of interest which has been raised in order to try to damper demand then your shooting yourself in the foot, probably damaging business investment more than you need to.
Now I am not against MIRAS but its only taking from one party and giving it to another. So should we support higher taxation in order to give it to house owners, seems a bit harsh on pensioners, those renting etc, no?

Vs high levels of people defaulting on mortgages and the associated social costs of that. And its not higher taxation - its lower tax revenues which will be recouped anyway through inheritance tax, particulary if it offsets a fall in house prices.

My point of disagreement is that mortgages should not be subject to any protection from the state, whereas in reality these things are always a balance - the very act of taxation is taking from one group and giving to another. If we can provide support for energy bills, we can do the same for housing.

 

[Hagar]

Raising rates effect mortgage holders significantly more than other groups. A big chunk of people have no mortgage, mostly because they are older and have paid it off. Where is the incentive on those people to dampen their demand?

So rates as a tool is very biased towards mortgage holders, who are expected to take all the pain whilst other groups generate even more money off their savings.

Energy bills effected everyone, that should have dampened demand across everyone left unchecked. But instead they gave out money for that (which I of course also benefited from), which actually will have helped reinforce inflation.

The policies are not working together anyway, so why excessively penalise mortgage holders in this?

So when you were basking on your 1% interest rate and older people on fixed incomes and reliant on their savings interest were getting 0.05 to 0.1% returns, I don't suppose you even considered that or even thought about it..

Mortgages as a financial instrument are always and have always been tied to base rates. In every single country under every single administration. You obviously need to design something previously unknown.

 

[krooton]

So when you were basking on your 1% interest rate and older people on fixed incomes and reliant on their savings interest were getting 0.05 to 0.1% returns, I don't suppose you even considered that or even thought about it..

Mortgages as a financial instrument are always and have always been tied to base rates. In every single country under every single administration. You obviously need to design something previously unknown.

Isn't this why having something like a salary sacrifice balances a bit better? Interest rates can stay high for savers, and the salary sacrifice can help mortgaged/renting people without impacting that.

It would be interesting to know the total number of people renting, with mortgages, and without, and the amount of money in savings for each group, and the total amount of mortgage debt liability out there.

If the majority of people have mortgages, and the amount of mortgage debt is much more than that invested in savings, could it not be said that the needs of the many outweigh the needs of the few?

The is all hypothetical stuff obvs.

 

[Mercenary Keyboard Warrior]

Vs high levels of people defaulting on mortgages and the associated social costs of that. And its not higher taxation - its lower tax revenues which will be recouped anyway through inheritance tax, particulary if it offsets a fall in house prices.

My point of disagreement is that mortgages should not be subject to any protection from the state, whereas in reality these things are always a balance - the very act of taxation is taking from one group and giving to another. If we can provide support for energy bills, we can do the same for housing.

If we see 80s and 90s levels of repos then lets talk again.

Energy bills was a short term one off. If you make housing more affordable via taxation you create a long term liability that has to be paid for and also do two other worrying things, firstly you introduce another risk that it could be withdrawn later when people are used to it, and secondly its likely to raise prices which are more linked to affordability than anything else. (Supply and demand)

Isn't this why having something like a salary sacrifice balances a bit better? Interest rates can stay high for savers, and the salary sacrifice can help mortgaged/renting people without impacting that.

It would be interesting to know the total number of people renting, with mortgages, and without, and the amount of money in savings for each group, and the total amount of mortgage debt liability out there.

If the majority of people have mortgages, and the amount of mortgage debt is much more than that invested in savings, could it not be said that the needs of the many outweigh the needs of the few?

The is all hypothetical stuff obvs.

Its a terrible idea, MIRAS would be far better. Its the same effect whilst in work, but say lose your job and with salary sacrifice you would see your mortgage payments go up as your having to pay them out of your savings!

 

[Kill_Phil]

It's alright people can just sell up and move into a caravan according to folks on here. Sorted.

 

[Hagar]

More people now own their homes outright than have a mortgage or rent them. Figures show that 32.6 per cent of dwellings were owned outright in England in 2021, up from 30.7 per cent in 2011. Another 28 per cent of properties are owned with a mortgage or loan, down four percentage points on a decade earlier.31 Mar 2023

 

[krooton]

More people now own their homes outright than have a mortgage or rent them. Figures show that 32.6 per cent of dwellings were owned outright in England in 2021, up from 30.7 per cent in 2011. Another 28 per cent of properties are owned with a mortgage or loan, down four percentage points on a decade earlier.31 Mar 2023

Does that mean BTL landlords who have paid off their properties and are in full profit mode are rolled up in to that 32.6%?

 

[413x]

But they'll take the house to pay for care. It seems like you either need to be wealthy enough to not care, or poor enough to not care...
The people in the middle who work hard, manage to buy a house and save but not be wealthy are the ones that are always screwed over.

Probably. Gamble to risk. It and gamble everything in hope that state care will be any cop!
But yeah. Likely outcome.

 

[BongoHunter]

More people now own their homes outright than have a mortgage or rent them. Figures show that 32.6 per cent of dwellings were owned outright in England in 2021, up from 30.7 per cent in 2011. Another 28 per cent of properties are owned with a mortgage or loan, down four percentage points on a decade earlier.31 Mar 2023

So if 33% are owned outright, and 28% have a loan or mortgage, what's the other 39% upto?

 

[Martini1991]

But they'll take the house to pay for care. It seems like you either need to be wealthy enough to not care, or poor enough to not care...
The people in the middle who work hard, manage to buy a house and save but not be wealthy are the ones that are always screwed over.

I feel like I fall into this category, although I wouldn't particularly say I was in the middle (I mean the absolute lowest of the middle at an absolute stretch, maybe possibly in the North East, particularly Middlesbrough)

With average wages in the area (And public sector pay freezes......) Our household income is 43K, we've got a mortgage of 160K on a house worth 215K. With all of the bill increases, mortgage rate increase, our disposable income will basically disappear (I mean we're literally talking about an extra 4K a year for nothing, while being told to not get a pay rise. That's not a nothing amount of money). Until then we did rather well everything considered, we have healthy savings compared to the average etc.

But people still need to do the jobs we do, I don't understand how people with lower household incomes are meant to cope.

Just feels like the country is headed towards a greater and greater wealth divide. I mean there's clearly pockets of money all over the place.

 

[Hagar]

So if 33% are owned outright, and 28% have a loan or mortgage, what's the other 39% upto?

Renting or in multi generational housing maybe. However 60% home ownership is still quite high. The comment on BTL, many are not owned outright and bought in a mortgage, the fact that the ratios are still similar to when Blair enabled much of the BTL suggests not much change although anecdotally many landlords are now selling up.

 

[Martini1991]

IMO the issue is not homebuying its the lack of social housing.
I am not against social housing and would support more being built, however I will never support the state (and hence all the population) somehow guaranteeing those doing well enough to be buying a house off the backs of those significantly poorer then themselves who will never get that opportunity.
Buying a house should come with the risks of doing so. If you want the benefits suck up the risk buttercup.

Funny I don't get it because I am a Tory and yet those who criticise in effect want exactly that.

What's the threshold for secure social housing? Who's allowed it?
Is a couple working full time on minimum wage able to get a social housing house?

Because we've basically privatised social housing and house building, new stock "built for renters" costs a fortune per month (Right now on my estate they want about £800 for the entry level 2 bed)

So this is a 3 bed house (Smaller than my 3 bed slightly) - https://www.rightmove.co.uk/properties/136023878#/?channel=RES_LET on my estate that's "built for renters". I consider that to be what our standard of housing stock should be for an entry 3 bed (I'm not really one to advocate people live in an old house that's stuck in the decade it was built)

 

[krooton]

Renting or in multi generational housing maybe. However 60% home ownership is still quite high. The comment on BTL, many are not owned outright and bought in a mortgage, the fact that the ratios are still similar to when Blair enabled much of the BTL suggests not much change although anecdotally many landlords are now selling up.

Surely that would be households, homes are either owned outright or mortgaged, regardless of whether it's inhabitants are renting or not.

 

[Hagar]

More people now own their homes outright than have a mortgage or rent them.

Figures show that 32.6 per cent of dwellings were owned outright in England in 2021, up from 30.7 per cent in 2011.

Another 28 per cent of properties are owned with a mortgage or loan, down four percentage points on a decade earlier.

And 20 per cent are privately rented, up 3.7 per cent, the Office for National Statistics said.

In addition, 17 per cent are classed as social housing.

Overall the figures showed there were 24.9 million dwellings across England in 2021, up 8.5 per cent in a decade.

The more complete statistic

More people in England now own homes than have a mortgage or rent them

Figures show that 32.6 per cent of dwellings were owned outright in England in 2021, up from 30.7 per cent in 2011. Another 28 per cent of properties are owned with a mortgage or loan.

www.thisismoney.co.uk

 

[krooton]

More people now own their homes outright than have a mortgage or rent them.

Figures show that 32.6 per cent of dwellings were owned outright in England in 2021, up from 30.7 per cent in 2011.

Another 28 per cent of properties are owned with a mortgage or loan, down four percentage points on a decade earlier.

And 20 per cent are privately rented, up 3.7 per cent, the Office for National Statistics said.

In addition, 17 per cent are classed as social housing.

Overall the figures showed there were 24.9 million dwellings across England in 2021, up 8.5 per cent in a decade.

The more complete statistic

More people in England now own homes than have a mortgage or rent them

Figures show that 32.6 per cent of dwellings were owned outright in England in 2021, up from 30.7 per cent in 2011. Another 28 per cent of properties are owned with a mortgage or loan.

www.thisismoney.co.uk

OK, but that 20% privately rented will either be mortgaged or owned outright by the landlord (or housing association I guess).

 

[Kamakazie!]

Still encourages everyone to constantly borrow to their maximum ratio.

Exactly, and if people are suffering at 4.5% base rate it's yet more proof that lender controls & stress tests are insufficient.