Mortgage Rate Rises

[matt100]

There is precisely 1 property within 5 miles of me that you could buy with NWM.

It's a slightly terrifying looking 1 bed maisonette.

 

[Richie]

I thought you doxxed yourself for a moment right there @413x

 

[tonys]

Neither, otherwise they wouldn't be presenting as homeless, would they.

It's going to be for all sorts of reasons, rents becoming unaffordable or arrears during Covid and being evicted, extended family breakdowns, I'm sure we will see more and more bank evictions from mortgaged properties, that hasn't really kicked off yet.

The point is it wasn't even a category 5 years ago that anyone thought about.

I meant, whether it was renters or homeowners who had problems obviously. We've seen this before, you know back in the old times but for you this is all new. Unfortunately you will probably see more as time goes on because of the fixed rate mortgage terms coming to an end and the owners face a sudden huge increase.

 

[Jono8]

I expect it would be more in St Albans right?

We have a 3 (2.5 really) bed detached. It's not big at all. But it is properly detached with (for a newish build) a lot of garden.

Its 320-340ish on right move/zoopla.

In St Albans.. Not sure what an equivalent would cost!


Well.. Ours is better than this

Yeh, there are some mega silly prices in the commuter belt/close suburbs of London.

My old family house in Surrey which is a pretty old, average sized 3 bed semi with an average garden and one space on the drive with garage is now worth nearly £800k...! Whole road of similar houses are going for that.

Similarly they built brand new 4 bed terrace houses behind where I used to work. TERRACE, 4 bed but not that big. Backed on to an industrial estate and train track, no garage or drive (had a communal parking area) and tiny garden with a big corrugated warehouse roof at the back (lovely view
..) and they sold them all for £750 - 800k.

I just don't understand who is buying them or how anyone can afford them.

If ever there is a crash due, it's due in those areas. It doesn't even make sense to pay so much to be close to London now with modern technology and remote working etc.

 

[413x]

I thought you doxxed yourself for a moment right there @413x

Ha no. And I had to Google that term!

 

[tonys]

I do wonder what that's going to look like.

Imagine the welfare bill.
I guess there will be very little. I mean if it's creaking now who knows what it will be like in 30 years.

Did we know what it would be like in 30 or 40 years when we started to work?

 

[Sythe79]

I meant, whether it was renters or homeowners who had problems obviously. We've seen this before, you know back in the old times but for you this is all new. Unfortunately you will probably see more as time goes on because of the fixed rate mortgage terms coming to an end and the owners face a sudden huge increase.

When have we seen this before ? Maybe the end of the slum lord period of the late 19th, early 20th century, but you're right I'm not 150 so no I wasn't around.

 

[413x]

Did we know what it would be like in 30 or 40 years when we started to work?

No. But if things carry on as they are.. Its not looking pretty.

Things I don't see reversing
-population decline
-pension black hole
-wealth divide
-climate change
-microplastics and other such modern/new issues

What could be reversed but probably not
-state of public services
-Inc state of NHS.

Undecided
-the effect of AI/automation/robotics
-- AI will provide many benefits. But the has the potential for massive harm. Heck. Even copilot taking meeting notes automatically is crazy. Let alone chat gpt 4 writing code! Benefits to medical care could be groundbreaking though.

 

[tonys]

Yeh, there are some mega silly prices in the commuter belt/close suburbs of London.

My old family house in Surrey which is a pretty old, average sized 3 bed semi with an average garden and one space on the drive with garage is now worth nearly £800k...! Whole road of similar houses are going for that.

Similarly they built brand new 4 bed terrace houses behind where I used to work. TERRACE, 4 bed but not that big. Backed on to an industrial estate and train track, no garage or drive (had a communal parking area) and tiny garden with a big corrugated warehouse roof at the back (lovely view
..) and they sold them all for £750 - 800k.

I just don't understand who is buying them or how anyone can afford them.

If ever there is a crash due, it's due in those areas. It doesn't even make sense to pay so much to be close to London now with modern technology and remote working etc.

The point is that they are being bought even though the statistics say we have this huge gulf between the wages and house prices.

 

[413x]

The point is that they are being bought even though the statistics say we have this huge gulf between the wages and house prices.

They are being bought due to the growing rich poor divide.

 

[fez]

I just don't understand who is buying them or how anyone can afford them.

People on six figure salaries and probably a couple. People who are mortgaged up to their eyeballs or who have wealthy families who can help them with deposits. A large number of these expensive houses will also simply be owned by people who bought decades earlier at much cheaper prices or people who bought decades ago and have ridden their way up the ladder with increasing house prices.

Thats essentially what we will do. Our next house will be our forever home and we will have gone from a flat to a 3 bedroom house and then to probably a 4-5 bedroom house. Over the (probably 10 years) we will have been in the housing market we will have gained about £150-200,000 simply from property increases and then we will have aggressively paid down our mortgages. Even then with two of us earning decent ish salaries our next house will saddle us with probably £400-500,000 on the mortgage on a £900k-1m house.

 

[Jono8]

People on six figure salaries and probably a couple. People who are mortgaged up to their eyeballs or who have wealthy families who can help them with deposits. A large number of these expensive houses will also simply be owned by people who bought decades earlier at much cheaper prices or people who bought decades ago and have ridden their way up the ladder with increasing house prices.

Thats essentially what we will do. Our next house will be our forever home and we will have gone from a flat to a 3 bedroom house and then to probably a 4-5 bedroom house. Over the (probably 10 years) we will have been in the housing market we will have gained about £150-200,000 simply from property increases and then we will have aggressively paid down our mortgages. Even then with two of us earning decent ish salaries our next house will saddle us with probably £400-500,000 on the mortgage on a £900k-1m house.

Yeh but it's a 3 bed semi :/...for £800k

 

[tonys]

When have we seen this before ? Maybe the end of the slum lord period of the late 19th, early 20th century, but you're right I'm not 150 so no I wasn't around.

1990's recession when 75,000 homes were repossed in 91 declining til around 2004

 

[tonys]

They are being bought due to the growing rich poor divide.

Yes that is the problem now and it was back when we bought our first house. People with more money offering more than the houses were valued at or couples taking out the maximum that they could go for without a small safety net.

 

[Sythe79]

1990's recession when 75,000 homes were repossed in 91 declining til around 2004

And rents were reasonable, and there was at least still some public housing. You're right in the fact you can probably trace that to being the beginning of the downward spiral that is the UK housing mess, but it simply wasn't just as bad.

 

[Blackjack Davy]

No. But if things carry on as they are.. Its not looking pretty.

Things I don't see reversing
-population decline

Population is increasing in england and in the SE in particular the majority due to immigration

1990's recession when 75,000 homes were repossed in 91 declining til around 2004

Yep remember that my sister newly married bought a tiny one bed and had to give it up because they couldn't afford the mortgage increases negative equity became a thing at that time properties worth less than people were paying for them was sold for less than they paid for it iirc took an age to tend that around pretty sure it contributed to the divorce

 

[tonys]

People on six figure salaries and probably a couple. People who are mortgaged up to their eyeballs or who have wealthy families who can help them with deposits. A large number of these expensive houses will also simply be owned by people who bought decades earlier at much cheaper prices or people who bought decades ago and have ridden their way up the ladder with increasing house prices.

Thats essentially what we will do. Our next house will be our forever home and we will have gone from a flat to a 3 bedroom house and then to probably a 4-5 bedroom house. Over the (probably 10 years) we will have been in the housing market we will have gained about £150-200,000 simply from property increases and then we will have aggressively paid down our mortgages. Even then with two of us earning decent ish salaries our next house will saddle us with probably £400-500,000 on the mortgage on a £900k-1m house.

Ask yourself why do you want to saddle yourself with so much debt?

 

[413x]

People on six figure salaries and probably a couple. People who are mortgaged up to their eyeballs or who have wealthy families who can help them with deposits. A large number of these expensive houses will also simply be owned by people who bought decades earlier at much cheaper prices or people who bought decades ago and have ridden their way up the ladder with increasing house prices.

Thats essentially what we will do. Our next house will be our forever home and we will have gone from a flat to a 3 bedroom house and then to probably a 4-5 bedroom house. Over the (probably 10 years) we will have been in the housing market we will have gained about £150-200,000 simply from property increases and then we will have aggressively paid down our mortgages. Even then with two of us earning decent ish salaries our next house will saddle us with probably £400-500,000 on the mortgage on a £900k-1m house.

Gees. That's a lot.

We won't be going up in value if we move. I don't want anymore mortgage. I'd only end up equity releasing/downsizing when old.

I think we will stay within 50k of whatever this house sells for.

 

[tonys]

And rents were reasonable, and there was at least still some public housing. You're right in the fact you can probably trace that to being the beginning of the downward spiral that is the UK housing mess, but it simply wasn't just as bad.

I've had 2 houses from 1981 til now, in that time we have had almost everything thrown at us, unemployment, low wages, recession, high interest rates, gazumping, etc. I'm still paying my mortgage til I'm 67-68, so that is a 45ish term. If we sell we will make very little money from it as the property we would have to buy will also be at an inflated value. Not everyone is a winner in life.

 

[tonys]

Yep remember that my sister newly married bought a tiny one bed and had to give it up because they couldn't afford the mortgage increases negative equity became a thing at that time properties worth less than people were paying for them was sold for less than they paid for it iirc took an age to tend that around pretty sure it contributed to the divorce

That was because the increases were immediate not 5yrs down the line.
Yes looking at my old house on Right move and it said this(I'm sure it's wrong)

2 bed, terraced
£95,000
16 Feb 2011
£95,000
28 Oct 2004
£43,000
31 Aug 2001
We sold it in 1985 for £46,000.