Mortgage Rate Rises

[fez]

Personally I think 99pc mortgages are a step to far and it shouldn't go ahead.
The multiplier definitely shouldn't be raised either.

These things just push prices up and hurt the people following.

You're assuming that the Tories give a single **** about that. Politics for years has been about the next 6 months and the next election. People have the memories of fish and are entirely selfish. The next election will be a lot tighter than people think purely because the Tories know how to play to their audience. Immigration, pensions, economy and housing. People will forget the fact all of these things have been an absolute **** show under them for over a decade as long as the promises sound good enough.

I mean, I guess you get the politicians you deserve. We have become a people who only care about ourselves so why would we have politicians who didn't do the same.

 

[413x]

You're assuming that the Tories give a single **** about that. Politics for years has been about the next 6 months and the next election. People have the memories of fish and are entirely selfish. The next election will be a lot tighter than people think purely because the Tories know how to play to their audience. Immigration, pensions, economy and housing. People will forget the fact all of these things have been an absolute **** show under them for over a decade as long as the promises sound good enough.

I mean, I guess you get the politicians you deserve. We have become a people who only care about ourselves so why would we have politicians who didn't do the same.

Oh yeah I know in reality they don't care. And anything to get a few quick votes and they'll do it.

Big issue with politics is thinking to the next GE. Hence environment etc always gets chucked under the bus every time.

 

[200sols]

Whats the relevance of "real term price drops" when they have no actual significance in the real world though. As I said, its just pushing numbers around in a vacuum and saying "house prices are 13% lower in real terms". I can guarantee you that not a single person in the country has looked at getting a mortgage on a bigger house and said "thank god for that real term price drop on the house I want". No, they are saying "I can't move because the real world price increase on that house I want is about 30-40%".

So what is the relevance of it?

You're talking about affordability again. Both are relevant.

 

[fez]

You're talking about affordability again. Both are relevant.

Thats my point, I don't think anything but affordability really matters. No one cares if someone gives them £20 if they then take £100 from them. £80 is still gone. Doesn't matter if they give you £20 and take £80 or just take £80.

 

[200sols]

Thats my point, I don't think anything but affordability really matters. No one cares if someone gives them £20 if they then take £100 from them. £80 is still gone. Doesn't matter if they give you £20 and take £80 or just take £80.

The real house price directly affects the affordability though. If wages hadnt risen etc then the affordability would be even worse. The price + the financing rate both work together. I'm actually surprised the fall hasn't been greater.

 

[danlightbulb]

Personally I think 99pc mortgages are a step to far and it shouldn't go ahead.
The multiplier definitely shouldn't be raised either.

These things just push prices up and hurt the people following.

I agree with 99/100% mortgages. If someone can afford £1000 rent then they can afford £1000 mortgage. But they might not be able to afford to save £20-30k deposit whilst paying £1000 rent, which is fair enough.

Yes it will bolster the market a bit, so yes we do need more housing. But its not fair to those renting to hold back on their opportunity to get on the ladder because of that, if they are renting and can't raise a whopping deposit. "Sorry no mortgage for you because the macro effects will push up housing prices, keep wasting that rental money every month and be happy with it".

 

[Dirk Diggler]

A moment of silence for a guy I know at work. His mortgage has increased by £800.

1500 to 2300. Big ouch.

He fixed for 2 years last time when rates were mega low.

That increase is actually more than my monthly payment.

Ouch!

 

[Jono8]

I agree with 99/100% mortgages. If someone can afford £1000 rent then they can afford £1000 mortgage. But they might not be able to afford to save £20-30k deposit whilst paying £1000 rent, which is fair enough.

Yes it will bolster the market a bit, so yes we do need more housing. But its not fair to those renting to hold back on their opportunity to get on the ladder because of that, if they are renting and can't raise a whopping deposit. "Sorry no mortgage for you because the macro effects will push up housing prices, keep wasting that rental money every month and be happy with it".

But the market doesn't need bolstering, it needs a reality check.

Things like 99/100% mortgages are just papering over the cracks and leading to a lot more pain down the line as house prices continue to outpace wage growth.

When does it stop? We are already at average house prices being 8x the median salary. Where does it stop? 15x? 20x? It isn't sustainable.

 

[danlightbulb]

But the market doesn't need bolstering, it needs a reality check.

Things like 99/100% mortgages are just papering over the cracks and leading to a lot more pain down the line as house prices continue to outpace wage growth.

Yes but its not fair on a generation of younger people who are going to be stuck renting if this policy is not enacted. Yes we need to build more housing, but that will take decades, its not fair to make a generation of people suffer for that as its not their fault.

 

[Jono8]

Yes but its not fair on a generation of younger people who are going to be stuck renting if this policy is not enacted. Yes we need to build more housing, but that will take decades, its not fair to make a generation of people suffer for that as its not their fault.

But you will just be passing on the pain to future generations.

 

[rypt]

Yes but its not fair on a generation of younger people who are going to be stuck renting if this policy is not enacted. Yes we need to build more housing, but that will take decades, its not fair to make a generation of people suffer for that as its not their fault.

Agreed

The "real solution" is to build new housing (doesn't have to be houses, can be high density apartments).

The problem is that no government (central or local) in recent memory seems to be interested in real solutions.

 

[danlightbulb]

But you will just be passing on the pain to future generations.

I know.

Im saying we need more housing. That has to be done as well, and its critical.

But in the meantime, people still need houses now and the deposit is a major barrier. Its not fair on people, young families, to make them rent (paying someone wealthier than them's mortgage) rather than letting them own their own place for the same monthly outlay.

 

[jaybee]

"It's not sustainable".
People have been saying it for decades. House prices continue to rise.
A "crash" like 2008 is just a blip in the ever increasing rise of prices, even if it happens again.
The system is not fixable outside of extremes. Wealth inequality has been allowed to grow for decades and decades to obscene levels. The gap now to the rich is immense.

 

[413x]

Yes but its not fair on a generation of younger people who are going to be stuck renting if this policy is not enacted. Yes we need to build more housing, but that will take decades, its not fair to make a generation of people suffer for that as its not their fault.

As said. It only helps the initial cohort. It just makes it more difficult for the next lot again.

We should have never gone beyond 3x borrowings.
And also had some rent caps. That would have kept prices down and stopped this spiraling up of prices.

IMO the housing market shouldn't be free enterprise where anyone with enough cash can hold everyone else captive.

 

[tonys]

As said. It only helps the initial cohort. It just makes it more difficult for the next lot again.

We should have never gone beyond 3x borrowings.
And also had some rent caps. That would have kept prices down and stopped this spiraling up of prices.

IMO the housing market shouldn't be free enterprise where anyone with enough cash can hold everyone else captive.

Nor should there be second homes in areas where locals don't have a hope of getting onto the ladder.

 

[fez]

The real house price directly affects the affordability though. If wages hadnt risen etc then the affordability would be even worse. The price + the financing rate both work together. I'm actually surprised the fall hasn't been greater.

Right, but its part of affordability and ultimately the constituent parts are irrelevant, hence my metaphor. Yes it would be even worse without that slight upside but affordability is still out of the window and that is the only thing that really matters.

Yes but its not fair on a generation of younger people who are going to be stuck renting if this policy is not enacted. Yes we need to build more housing, but that will take decades, its not fair to make a generation of people suffer for that as its not their fault.

See below.

But you will just be passing on the pain to future generations.

I know.

Im saying we need more housing. That has to be done as well, and its critical.

But in the meantime, people still need houses now and the deposit is a major barrier. Its not fair on people, young families, to make them rent (paying someone wealthier than them's mortgage) rather than letting them own their own place for the same monthly outlay.

The problem is that every time you prop up the markets or tweak something to allow people to saddle themselves with more debt and inflate the market you just make the problem worse. And when you put a plaster over the gaping wound, it suddenly seems like a little less of an issue and could delays the proper fix.

Imagine if you sold loads of houses on 99% mortgages and then went on a massive scale nationwide house building project. Those people could end up with houses that are devalued, they have zero equity and are being shafted in another way. A policy of just kicking the can down the road has not served us well and this would just be the latest kick.

 

[jaybee]

Nor should there be second homes in areas where locals don't have a hope of getting onto the ladder.

UK population in 2022 was stated as 67 million with 19% of it in private rentals from a quick google. If you imposed no second home ownerships and wiped out all the BTL landlords overnight, what would the 12.7 million people do living in those houses?

 

[danlightbulb]

As said. It only helps the initial cohort. It just makes it more difficult for the next lot again.

We should have never gone beyond 3x borrowings.
And also had some rent caps. That would have kept prices down and stopped this spiraling up of prices.

IMO the housing market shouldn't be free enterprise where anyone with enough cash can hold everyone else captive.

I completely agree.

Nor should there be second homes in areas where locals don't have a hope of getting onto the ladder.

I completely agree.

he problem is that every time you prop up the markets or tweak something to allow people to saddle themselves with more debt and inflate the market you just make the problem worse. And when you put a plaster over the gaping wound, it suddenly seems like a little less of an issue and could delays the proper fix.

Absolutely. But that still doesn't make it fair on current renters right now. Unless we can build a million houses overnight, then by not doing anything else you're condemning those current renters to renting, which also isn't right.

Imagine if you sold loads of houses on 99% mortgages and then went on a massive scale nationwide house building project. Those people could end up with houses that are devalued, they have zero equity and are being shafted in another way. A policy of just kicking the can down the road has not served us well and this would just be the latest kick.

The solution can't be to just lock those people into rent though can it. And we know we can't build the properties quick enough (which should be the right answer). So what's the solution?

 

[200sols]

Right, but its part of affordability and ultimately the constituent parts are irrelevant, hence my metaphor. Yes it would be even worse without that slight upside but affordability is still out of the window and that is the only thing that really matters.

The deposit amount is also correlated to the house price.

 

[tonys]

UK population in 2022 was stated as 67 million with 19% of it in private rentals from a quick google. If you imposed no second home ownerships and wiped out all the BTL landlords overnight, what would the 12.7 million people do living in those houses?

Not talking about rented properties but holiday homes. Rented property should be better regulated in regards to pricing and conditions.