Mortgage Rate Rises

[HungryHippos]

I read in the news that options were being looked at for mortgage support, but not sure this can be easily covered by the state.

Perhaps instead they can put people who are struggling onto interest only rates? The balance gets frozen, but should prevent monthly costs getting too crazy.

 

[unwashed potato!]

Perhaps instead they can put people who are struggling onto interest only rates? The balance gets frozen, but should prevent monthly costs getting too crazy.

the trouble with that is that it just kicks the can down the road, and if anything will make payments higher in the future if they aren't paying off their debt, but the term is reducing each year.

imo something like £100 per month to any house that has a mortage over £200k and is paying over 5%.

however, the raising of interest rates is surely to make people poor, so giving help only means people have more money

 

[HungryHippos]

the trouble with that is that it just kicks the can down the road, and if anything will make payments higher in the future if they aren't paying off their debt, but the term is reducing each year.

imo something like £100 per month to any house that has a mortage over £200k and is paying over 5%.

however, the raising of interest rates is surely to make people poor, so giving help only means people have more money

You can interest only for a year and add a year to the term, so no future changes necessary just freezes all as is. Some hybrid of this makes sense to me, even interest only + pay off whatever you can off the principal.

 

[Jelly4mybelly]

I read in the news that options were being looked at for mortgage support, but not sure this can be easily covered by the state.

Nor should it be.

 

[Raymond Lin]

Not deliberate, I suppose because I see the two topics as interlinked, i.e the abundance of land and resources in the US (and the lack of it here) is what has led to the differences in houses and other things.

There is such a large expanse of available land and resources in the US, it's almost unfathomable in terms of scale. I was playing on flight sim the other day and I flew from Birmingham to North Wales. It took a matter of seconds to fly over the mountains I enjoy walking on. Then I flew across one of the US's airforce bases near Los Angeles, which is almost larger than our whole country.

I'd quite fancy having my own ranch in the US that was so big it would take days to cross it. Amazing lifestyle.

But the point you were making is to use all the space to build housing…which goes completely against your “hobbies” point. As all the housing now has taken over all the space you need for your imaginary ranch.

(side note. I have to say that kind of life style don’t interest me, the attention to keep it secure, tended to, the up keep, the taxes and running cost, all for what? I might walk across it once? Utterly pointless, like compensating for something. A nice place just on the edge of the city in a nice area is fine. Should I need emergency medical treatment it’s not far away, and kids don’t have to travel far to school and civilisation is on the doorstep. But it’s a personal thing, you do you.)

The point I was making isn’t how vast the US is. But how bad a town it will be if you build houses all spread out. They are completely separate topics.

 

[danlightbulb]

Special BoE domestic mortgage only base rate, as I've championed now for months.

Yes it will mean that money isn't sucked from the pockets of normal people quite as quickly, but given the inflation is mostly externally driven, it's pretty obvious by now that the only way inflation is coming down is to put a lot of people into financial ruin and destroy a lot of the economy in the process. Blunket said on QT last Thursday that the intention was never for BoE to be left using their hammer alone to solve a problem like this.

Could be offset by increases to higher end taxes and/or introduction of wealth taxes if currency devaluation a concern. Start taking money out at the top end, not the middle or bottom end.

I don't see the difference to COVID or energy bill crisis in this. Both completely outside anyone's control, both potential to wreck havok, both got government support. Same here, inflation crisis not in anyone's control and potential to wreck havok on possibly millions of people.

People are stress tested to reasonable worst case scenarios for mortgages, this is well outside of any stress test scenarios already.

 

[danlightbulb]

But the point you were making is to use all the space to build housing…which goes completely against your “hobbies” point. As all the housing now has taken over all the space you need for your imaginary ranch.

Well not all the space no, there would still be lots left over.

What's wrong with less dense residential areas? We would all have more space for driveways, cars and garages. More space to grow our own food. More space for wider roads so that we don't get traffic problems. Build mass transit systems to move workers around from the residential zone to the industrial zone.

Not saying we build houses in difficult places like mountains or forests, but just let's sprawl a bit more. It's too late now in the UK anyway, any sprawl that does get built comes at a very hefty price now. Why doesn't the UK build a whole new town or city, and design it with lots of transport links, open space and parks?

Whole place needs knocking down and starting again tbh. Maybe after the nuclear/AI apocalypse those who remain could build more of a utopia.

 

[Hagar]

Well not all the space no, there would still be lots left over.

What's wrong with less dense residential areas? We would all have more space for driveways, cars and garages. More space to grow our own food. More space for wider roads so that we don't get traffic problems. Build mass transit systems to move workers around from the residential zone to the industrial zone.

Not saying we build houses in difficult places like mountains or forests, but just let's sprawl a bit more. It's too late now in the UK anyway, any sprawl that does get built comes at a very hefty price now. Why doesn't the UK build a whole new town or city, and design it with lots of transport links, open space and parks?

Whole place needs knocking down and starting again tbh. Maybe after the nuclear/AI apocalypse those who remain could build more of a utopia.

Your fantasy ranch lifestyle killed an awful lot of native Americans who did roam the land taking bison for meat and skins not by the hundreds of thousands but a lesser amount.

On a smaller scale we are squashing what is left of the UK wildlife now and that can only increase.

 

[tamzzy]

If I lived in Singapore, could I have a mountain biking hobby, gardening hobbies, a space for my car, space for camping gear, space for my scuba equipment or even any means of taking my scuba gear to actually use it? No to all of those. What would we do for hobbies, sit in tiny flats rotting away?

Absolutely. If you have $5m to buy a house as opposed to a flat
(I would know... I'm Singaporean and my parents own said property)

 

[200sols]

but given the inflation is mostly externally driven,

Nope. Not any more its in the economy as the core inflation figures tell you. That's why rates are going up. Also why should you get mortgage support but other who cant afford a house get nothing?(renters will be crying for help as well) People have become too used to massive state intervention. If the state intervenes now all it'll do is push up rates even further and then you are in a self defeating loop.

 

[413x]

Well not all the space no, there would still be lots left over.

What's wrong with less dense residential areas? We would all have more space for driveways, cars and garages. More space to grow our own food. More space for wider roads so that we don't get traffic problems. Build mass transit systems to move workers around from the residential zone to the industrial zone.

Not saying we build houses in difficult places like mountains or forests, but just let's sprawl a bit more. It's too late now in the UK anyway, any sprawl that does get built comes at a very hefty price now. Why doesn't the UK build a whole new town or city, and design it with lots of transport links, open space and parks?

Whole place needs knocking down and starting again tbh. Maybe after the nuclear/AI apocalypse those who remain could build more of a utopia.

It would suck up so much land. There has to be built up live in a box style urban centres or thier would be no nature.
Its bad enough with the amount of arable land, plantation ... And worse. Golf courses.

Don't need endless sprawl of people with huge plots of fake grass.

 

[413x]

Mortgage support would be hugely unfair. As much as I'd love some it just couldn't be justified

 

[200sols]

Mortgage support would be hugely unfair. As much as I'd love some it just couldn't be justified

And it'll just prop up the housing market again while the same people championing mortgage support also moan about high house prices.

 

[413x]

And it'll just prop up the housing market again while the same people championing mortgage support also moan about high house prices.

Its like the support given to those moving in covid but so much worse.

You're asking people who rent etc to directly fund other individuals better off than them. And also to make it harder for those to achieve the position of the individuals they are funding.

It would also help reward irresponsible behaviour like maxing out your mortgage potential

 

[GordyR]

Its like the support given to those moving in covid but so much worse.

You're asking people who rent etc to directly fund other individuals better off than them. And also to make it harder for those to achieve the position of the individuals they are funding.

It would also help reward irresponsible behaviour like maxing out your mortgage potential

I don’t think it’s going to happen this time, thankfully.

https://www.bloomberg.com/news/arti...-for-homeowners-times?leadSource=uverify wall

 

[Richie]

I'd quite fancy having my own ranch in the US that was so big it would take days to cross it. Amazing lifestyle.

Until the reality of living in the US sinks in...The grass is always greener and all that.

The lifestyle you are looking for would be achievable if you had a huge amount of money to support it. You don't.

 

[neocon]

You can't have thousands of families becoming homeless though because they lose their house they can no longer pay for. They'll just become a burden on the state and our taxes will be paying to house them.

 

[Richie]

imo something like £100 per month to any house that has a mortage over £200k and is paying over 5%.

What about if someone has a mortgage of £198k @ 5.5% who wouldn't get it whilst someone at £205k @ 5% would.

Special BoE domestic mortgage only base rate, as I've championed now for months.

Why? It'll still leave us with the same problems as this base rate carries on down the years with people maxing out payments again thereby also increasing house prices.

Sure, it suits you because you have a mortgage now and you hope it'll be lower than you have now but you're the same person who shouts about how the older generation made it unfair for the younger ones through making housing unaffordable.

On your idea, you'd be the older generation making it unfair for the younger ones by driving up hosting costs again and you gaining in property prices by, in your words, "doing nothing but being there are the right time" (I paraphrase)... You'll become the very people you are forever decrying.

?(renters will be crying for help as well) People have become too used to massive state intervention.

Renters did get housing support through COVID by the way of rent freezes/controls for a period.

I know it's ended now, just noting that it has happened for renter's.

I do agree that people now expect state intervention ever since furlough which is unsustainable.

 

[Freakbro]

You can't have thousands of families becoming homeless though because they lose their house they can no longer pay for.

You can and we do anyway, every year.

They have been at historically low levels lately, which is no surprise with such low interest rates, with only a few thousand per year but at times of financial turmoil repossessions always do rise.

The highest I see in this historical list being 75,500 in 1991

How Many Repossessions in UK Year on Year? - TIC Finance

Market factors, evolving lender practices, unemployment rates and economic policies have all influenced repossession statistics in the UK historically. In this article we have collected data from various sources to determine repossession trends in the UK. Repossession Statistics 1969 to 2019...

ticfinance.co.uk

 

[neocon]

You can and we do anyway, every year.

They have been at historically low levels lately, which is no surprise with such low interest rates, with only a few thousand per year but at times of financial turmoil repossessions always do rise.

The highest I see in this historical list being 75,500 in 1991

How Many Repossessions in UK Year on Year? - TIC Finance

Market factors, evolving lender practices, unemployment rates and economic policies have all influenced repossession statistics in the UK historically. In this article we have collected data from various sources to determine repossession trends in the UK. Repossession Statistics 1969 to 2019...

ticfinance.co.uk

I suppose they would potentially have money and so wouldn't be entitled to any benefit until they'd burned their cash away renting. Only then would it be the states problem.