Mortgage Rate Rises

[fez]

To a degree yes.
people who live on the street dont pay the same amount of taxes which is a problem.

You can't have an economy where no one has any money to spend because its all going on their mortgages either. You can't have a country were no one can afford a house unless they get a 100% mortgage over 35 years or help from their family.

Sometimes people need a shock that makes them realise that they can't live up to the edge of their means and then have the government step in when something happens.

I would put a fair chunk of money on the idea that a lot of the people who are claiming they can't afford their mortgages are still or have until very recently been wasting a lot of money on luxury goods.

 

[matt100]

The market isn’t that fragile. Since the changes to LTV and other lending rules came in it has been much more robust. We are talking about 30% of households (50% of owner occupied) that have a mortgage (ONS 2022) so a lot of people aren’t exposed. However there will be people that may be unfairly hit by interest rates for their home when the aim of the base rate changes is to curb spending rather than cause people to lose their home. I know there are people that really want a housing market crash so will be hating this news but it’s going to hurt the most vulnerable and poorest in society if we let it happen.

Is it fragile though? It will be propped up at the first true sign of proper struggles.

Perhaps, I don't believe there'll be a proper crash but I think it would be really really good for everyone for a long period of stagnation and I think it's sort of inevitable eventually.

When eventually is however.. not clear. I think we're likely to get down the road of ever more wild and desperate schemes like 40 year mortgages/more shared ownership etc before we really run out of gas.

 

[GordyR]

I would just like to make sure we all realise the Government aren't actually doing anything here or coming up with ideas, they are just saying out loud what they know the lenders can do anyway and hope some glitter rubs off on them. I bet this is thrown back at us all as something the Tories have "delivered"

Exactly, this is precisely what lenders would do under current terms anyway.

It's nothing new at all, pure hot air.

 

[fez]

Perhaps, I don't believe there'll be a proper crash but I think it would be really really good for everyone for a long period of stagnation and I think it's sort of inevitable eventually.

When eventually is however.. not clear. I think we're likely to get down the road of ever more wild and desperate schemes like 40 year mortgages/more shared ownership etc before we really run out of gas.

This is the problem. Everything is built on the idea of house prices rising quickly. Doesn't matter if you pay silly money for your house if someone else will pay you silly money plus in a few years. They will just come up with more and more ways for people to carry more debt. As you say, increasingly long mortgages will be a good way to do that.

The only way this is getting fixed is if the government invest massively in infrastructure and housing. Neither of these things will happen.

 

[matt100]

Exactly, this is precisely what lenders would do under current terms anyway.

It's nothing new at all, pure hot air.

Also, it may not affect your credit file but it sure as hell will get you flagged as a problem customer in that bank.

I swear half the reason the banks give people rope at times like this is because there's no sense in repossessing something you're going to need to fire sale into a dead or dying market. Makes no sense at all.

 

[Martynt74]

I would put a fair chunk of money on the idea that a lot of the people who are claiming they can't afford their mortgages are still or have until very recently been wasting a lot of money on luxury goods.

100%

Mortgage companies will have likely flexed the budgets to go to 5% and possibly even further. People have just got used to having spare additional money and so want to maintain the same level of lifestyle without cutting back.

Our mortgage is up around £600 a month, it's painful but it's manageable.

 

[200sols]

I would just like to make sure we all realise the Government aren't actually doing anything here or coming up with ideas, they are just saying out loud what they know the lenders can do anyway and hope some glitter rubs off on them. I bet this is thrown back at us all as something the Tories have "delivered"

Its the tories polishing a turd. I don't support extra giveaways anyway, its self defeating now.

 

[Mercenary Keyboard Warrior]

Brown did similar in 2008, Although specifically what they tweaked I cannot remember now.

I don't see this as necessarily all bad, although I would have hoped it required a say quarterly review of lender and home "owner"*
*Seems difficult to consider them the owner when they may actually own only 5% in effect.

First quarter everyone should be able to carry on.
Second quarter I would have wanted a more frank discussion on what and why the homeowner was doing.
Second half year, a specific plan.
I am all for prevent hard lender reaction, but equally I would want to see people being forced to face up to the situation rather than going head in the sand for 12 months.

If I was at risk of repossession due to not being able to pay my bills, and as much as it would be painful, I would be looking to sell.
I would want to keep as much of the sale in my hands as possible and not be paying in effect someone else to do it out of my equity.

 

[krooton]

Annoyingly, if we were able to get a 4 month mortgage holiday, we could clear enough unsecured debt to be ok again, but as it stands we can only get a holiday based on amounts overpaid, which we haven't done.
So now the mortgage is up 50%, and the unsecured debt interest rates also just keep going up, so we just end up screwed.

 

[Mr Badger]

One way to cut the population! Fewer poor people, some on here will rejoice.

It's actually likely to create more poor people...

 

[Kill_Phil]

Dumb question maybe but what's the purpose of allowing folks to delay mortgage terms? Isn't it just kicking the can down the road? It's not like people are suddenly gonna find a load of extra dosh

 

[Hagar]

Nothing adds up anymore, things have gotten silly, which is why this is happening I guess..



So basically, they're just creating a gigantic great tin can that can be kicked down the road, where people can run up insane amounts of arrears, to prevent a reposession crisis which would obviously insta-gib the Tory government at the next GE?

Is this not what Rachel Reeves was asking for yesterday?

 

[sigma]

It's actually likely to create more poor people...

More fuel for the fire!

 

[throwaway4372]

Dumb question maybe but what's the purpose of allowing folks to delay mortgage terms? Isn't it just kicking the can down the road? It's not like people are suddenly gonna find a load of extra dosh

let them be homeless when Labour are in Government?

 

[CapitalOne]

Dumb question maybe but what's the purpose of allowing folks to delay mortgage terms? Isn't it just kicking the can down the road? It's not like people are suddenly gonna find a load of extra dosh

That's exactly what it is.

I reiterate, wait until Sunak starts saying "I delivered a plan with the banks to help mortgage holders" when he actually means he asked them what they could do and then said "do that then"

 

[Kill_Phil]

That's exactly what it is.

I reiterate, wait until Sunak starts saying "I delivered a plan with the banks to help mortgage holders" when he actually means he asked them what they could do and then said "do that then"

I mean I'm no economist but won't it also prelong the desired effects of whacking up the interest rates too, so making them stick around for longer?

 

[jonneymendoza]

Keeping a roof over ones head is more important. Paying the mortgage is the priority. Especially when you have a family. All the 'entertainment' stuff is just that, 'stuff'.

But as I said, if u work in the entertainment business u will lose your job

 

[200sols]

But as I said, if u work in the entertainment business u will lose your job

They call that collateral damage.

 

[jonneymendoza]

They call that collateral damage.

That is ****.

Basically not a way to sort out inflation

 

[413x]

Dumb question maybe but what's the purpose of allowing folks to delay mortgage terms? Isn't it just kicking the can down the road? It's not like people are suddenly gonna find a load of extra dosh

I guess if someone loses thier job cause if a recession it gives a lifeline to finding a new one