Mortgage Rate Rises

[413x]

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.

Genuine question. Maybe it's naive.

If you bought a house for so little. And as we know houses have gone up in value.. Unless you lost the house at some point.. How isn't the mortgage paid off?

For us I won't ever need a bigger mortgage than I started with. Ie.. Baring losing job, house etc.. It'll never be over 200k (what it is now)

Surely those gains have been carried through your journey?

 

[tonys]

Genuine question. Maybe it's naive.

If you bought a house for so little. And as we know houses have gone up in value.. Unless you lost the house at some point.. How isn't the mortgage paid off?

For us I won't ever need a bigger mortgage than I started with. Ie.. Baring losing job, house etc.. It'll never be over 200k (what it is now)

We had a ****up with an endowment mortgage, so had to remortgage and then decided to have an extension built so again another remortgage. £90,000
About £19,000 left over the next 4yrs or there abouts. Payment of £390/month from £1,000 income plus the £300 the wife pays for her half of the bills. So yes, we're really wealthy
Forgot to say 2.5yrs unemployment during the 90's recession didn't help the savings account.

 

[Blackjack Davy]

The problem is UK housing has become popular with investors from overseas on top of domestic.

And as the rich / poor divide grows, you have to appreciate how much wealth some people have, they can buy streets and streets of houses.

And more often than not the properties investors go for are you more typical first time buyer properties which drives the whole thing from bottom up.

Whats also the **** take is wealth isn't taxed, and it's becoming more common for even average trading companies now offsetting profits into property held in companies.

Your average Joe on an average wage is having to compete against all of this.

Exactly people don't want to admit this though BTL wasn't a thing back in the early 90's nor was AirBNB if theres a property for sale at the lower end around here it goes to one or the other. People say "build more houses" but it all goes to second home owners etc where my mother lives there needs to be controls on the market but no-one want to upset the applecart hence its a free for all for those with the cash (or mortgage) and the resulting shortage just inflates prices even further which just drives the market ever onwards (and upwards)

 

[GordyR]

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

It's on an increasingly slowing and declining trajectory. The UK's natural population is expected to begin to decline starting in 2025.

National population projections - Office for National Statistics

The potential future population size of the UK and its constituent countries. These statistics are widely used in planning, for example, fiscal projections, health, education and pensions.

www.ons.gov.uk

The projected UK population growth is slower than in the 2018-based projections; the projected population is 0.6 million fewer in mid-2030 and 1.8 million fewer in mid-2045.

If current trends play out as we expect, then like most developed Western nations, we will see a continued slowing of growth, followed by an eventual turning point and the onset of overall population decline beginning at some point in the second half of this century.

Watch how quickly the dishonest rhetoric around immigration changes once we start seeing a massive working-age population decline.

 

[tonys]

Exactly people don't want to admit this though BTL wasn't a thing back in the early 90's nor was AirBNB if theres a property for sale at the lower end around here it goes to one or the other. People say "build more houses" but it all goes to second home owners etc where my mother lives there needs to be controls on the market but no-one want to upset the applecart hence its a free for all for those with the cash (or mortgage) and the resulting shortage just inflates prices even further which just drives the market ever onwards (and upwards)

Similar here, flat were built as affordable housing for emergency service workers near to the general hospital probably 15 years ago or more. However within a few years they were being sold to buy to let landlords so very few are actually affordable. As far as I'm aware there were no restrictions on the selling or buying.

 

[matt100]

I'm all for increasing the stamp duty on investment second homes much more than it is now. It would be take a while but would avoid a big collapse.

The only caveat being some sensible exclusions/reliefs for example for properties occupied full time by family members etc.

 

[tonys]

I'm all for increasing the stamp duty on investment second homes much more than it is now. It would be take a while but would avoid a big collapse.

The only caveat being some sensible exclusions/reliefs for example for properties occupied full time by family members etc.

There is a lot of measures that need to be implemented, for a start a standard fee for sales rather than a percentage.

 

[fez]

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

Because we want to live in a nice area and want a nice house. Thats how much nice houses cost around here. That won't even be anything special either. People build lives in certain areas and expecting them to move their lives and careers around due to property prices isn't a good thing.

We have a couple of options.

Move further out into the sticks where we have to drive absolutely everywhere to get a cheaper house like we want.

Move to a completely different area and upend our lives.

Suck up the housing cost and live where we want to live.

 

[413x]

Because we want to live in a nice area and want a nice house. Thats how much nice houses cost around here. That won't even be anything special either. People build lives in certain areas and expecting them to move their lives and careers around due to property prices isn't a good thing.

We have a couple of options.

Move further out into the sticks where we have to drive absolutely everywhere to get a cheaper house like we want.

Move to a completely different area and upend our lives.

Suck up the housing cost and live where we want to live.

What does the extra mortgage burden get you?
Is it just "better" or is it actually difference between a garden and no garden (as an example)

 

[200sols]

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

@dlockers has entered the chat.

 

[fez]

What does the extra mortgage burden get you?
Is it just "better" or is it actually difference between a garden and no garden (as an example)

Currently we have a 3 bedroom house with on road parking and a reasonable garden but its not very child friendly. House is quite nice and 110sq/m but its in a less nice area of TW.

The next house up will likely have:

Off street parking
Garage
Larger garden
4 bedrooms, maybe 5 and larger living spaces
Likely a nicer area

 

[tonys]

Because we want to live in a nice area and want a nice house. Thats how much nice houses cost around here. That won't even be anything special either. People build lives in certain areas and expecting them to move their lives and careers around due to property prices isn't a good thing.

We have a couple of options.

Move further out into the sticks where we have to drive absolutely everywhere to get a cheaper house like we want.

Move to a completely different area and upend our lives.

Suck up the housing cost and live where we want to live.

Only you can decide on what you need to do but the first sentence says it all
"Because we want to live in a nice area and want a nice house." To get what you want you will need to sacrifice something.

 

[matt100]

Only you can decide on what you need to do but the first sentence says it all
"Because we want to live in a nice area and want a nice house." To get what you want you will need to sacrifice something.

It's all relative to your income though..

I'm in the £800k 3 bed semi club but it means I get to live near a job that means the percentage of my income that goes on it is likely similar to if I moved to my hometown in west Yorkshire and got whatever job I could there as my industry just isn't there.

 

[tonys]

@dlockers has entered the chat.

So long as he doesn't start building a new house we'll be fine

 

[tonys]

It's all relative to your income though..

I'm in the £800k 3 bed semi club but it means I get to live near a job that means the percentage of my income that goes on it is likely similar to if I moved to my hometown in west Yorkshire and got whatever job I could there as my industry just isn't there.

So you wouldn't try to put youself at a disadvantage as the statistics show?

 

[matt100]

So you wouldn't try to put youself at a disadvantage as the statistics show?

Sorry?

 

[fez]

Only you can decide on what you need to do but the first sentence says it all
"Because we want to live in a nice area and want a nice house." To get what you want you will need to sacrifice something.

Thats not the issue, its just a completely warped market of "this is your salary vs this is what you can afford".

On a very simple basis, the job you require to get house X has changed massively. Very few people of your generation would be able to afford anything like the sort of house they live in if they transferred their career and earnings into the current paradigm.

People entering the job market now are largely buggered, sacrifice or not.

 

[tonys]

Thats not the issue, its just a completely warped market of "this is your salary vs this is what you can afford".

On a very simple basis, the job you require to get house X has changed massively. Very few people of your generation would be able to afford anything like the sort of house they live in if they transferred their career and earnings into the current paradigm.

People entering the job market now are largely buggered, sacrifice or not.

I've already shown that we could buy our original house on NMW, probably with extra time and sacrifice. It depends on your viewpoint, the statistics show you can't but several of us has said you can. Yes the market is screwed and has been for decades. If it continues then it will either collapse or there will be drastic measures put in place.

 

[fez]

If it continues then it will either collapse or there will be drastic measures put in place.

They will do whatever it takes to keep the gravy train rolling. Longer mortgage terms, 0% deposits, help to buy etc.

 

[tonys]

Sorry?

Just that you would buy a house you could afford not put yourself in serious debt