Mortgage Rate Rises

Jono8 said:
What happens when prices are stretched to where everyone is already at the maximum they can borrow over the longest term?

From what i can see, i just don't see how these rises are sustainable, especially with interest rates going from near zero to ~5% in the last few years.

The whole thing feels like a ticking time bomb
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Nope, they'll be forced to sell their property to the wealthy, and the rich poor divide grows.....
 
Jono8 said:
What happens when prices are stretched to where everyone is already at the maximum they can borrow over the longest term?
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They'll just keep increasing the length of term you can borrow over. They were looking at 50 yr mortgages over here, and in Japan and other places there are 100 yr mortgages already available.
 
Jono8 said:
What happens when prices are stretched to where everyone is already at the maximum they can borrow over the longest term?
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If people don’t have the money for ever increasing prices, they stop growing in real terms.

Jono8 said:
From what i can see, i just don't see how these rises are sustainable, especially with interest rates going from near zero to ~5% in the last few years.

The whole thing feels like a ticking time bomb
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I never said they would continue to grow at that rate. House price growth is closely linked to the amount of available money which is financing the demand side of the supply/demand equation.

If the amount of available money stops growing, demand slows and house prices stop growing. You’d expect house prices to continue to grow in line with wage growth.

Don’t forget a 5% growth in a house price is not really a 5% growth as you need to also take into account the value of money. If inflation is running at 3%, then it’s only really grown 2% in value.

House price growth slowing is not the bubble bursting, that only happens if the amount of available money drops significantly (which is closely linked to jobs/wages) or the availability of housing massively increases (building more or population size reduction) and that isn’t happening anytime soon.
 
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Jono8 said:
What happens when prices are stretched to where everyone is already at the maximum they can borrow over the longest term?

From what i can see, i just don't see how these rises are sustainable, especially with interest rates going from near zero to ~5% in the last few years.

The whole thing feels like a ticking time bomb
Click to expand...
As said... They can keep extending mortgages.. "you can apply for this 100 year mortgage"

They can expand the multiplier too "you can now borrow 6x your salary"

I expect at some point both of these will become untenable. What's the point of you won't be any better off than renting but you have all the restrictions of owning?

I agree I don't think house price growth has much further to go. I certainly wouldn't buy a house with the end game of owning 50 percent of it (as an example).

But house price growth has slowed now a lot in real terms.


Also. I don't think the bubble will burst. Just that house price growth will slow down and maybe stop in absolute terms. Which, imo, is no bad thing.
 
not paying the mortage is the last thing on my and many ofther people's list of what not to do if they find themselves in debt.

The correct order in my opinion is;
cut down on month spends, like food...
miss utility bill payments..
miss loan repayments..
miss credit card repayments
then finally miss mortage repayments.

Let's not forget that some people have income insurance and mortgage payment protection insurance that will keep them going for a few months.

I guess I'm in a lucky position, where the redundancies packages at my place is ridiculous, 6 months paid gardening leave, 1 month pay per year of service, payment for any unused holidays, and instant access to any company shares that are currently withheld with all the tax penalties paid for by the company.

one lad in a similar role to me was at the place for 10 years and voluntary redundancy, his redundancy pay alone was over the amount for his mortage, let alone the garderning leave, and shares...

I just need to stop myself from doing something stupid and getting sacked.. but once I paid off my mortage, I would love to be made redundant, get a goldern parachute payment, what's the alternative; work till your 67 and then get a happy retirement card and some rubblish retirement gift from your team, if you are lucky.
 
If Labour want to build one and a half million affordable homes within five years, the house to build would be a two and a half bed terrace built in straight lines with a parking space in the front with a car charger, a rectangular garden to the rear.
They would be warm with few external walls, cheap to run, all electric and sell for 200k to 250k, more in the south. They could be called the 'Rayner' and be built in their thousands quite quickly.
Satisfying the need to sell electric vehicles and the need for affordable housing together, the 'Rayner' would be a suitable monument to their aspirations and built in whatever the local material is most common brick or stone.
 
Hagar said:
If Labour want to build one and a half million affordable homes within five years, the house to build would be a two and a half bed terrace built in straight lines with a parking space in the front with a car charger, a rectangular garden to the rear.
They would be warm with few external walls, cheap to run, all electric and sell for 200k to 250k, more in the south. They could be called the 'Rayner' and be built in their thousands quite quickly.
Satisfying the need to sell electric vehicles and the need for affordable housing together, the 'Rayner' would be a suitable monument to their aspirations and built in whatever the local material is most common brick or stone.
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Housebuilders like detached, have you seen most new build estates these days? Full of 'detached' micro boxes 1ft from the next one and they attract a premium because of that. Honestly they may as well just build them all terraced anyway.
 
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Hagar said:
If Labour want to build one and a half million affordable homes within five years, the house to build would be a two and a half bed terrace built in straight lines with a parking space in the front with a car charger, a rectangular garden to the rear.
They would be warm with few external walls, cheap to run, all electric and sell for 200k to 250k, more in the south. They could be called the 'Rayner' and be built in their thousands quite quickly.
Satisfying the need to sell electric vehicles and the need for affordable housing together, the 'Rayner' would be a suitable monument to their aspirations and built in whatever the local material is most common brick or stone.
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It costs about that to build a one bedroom shoebox flat, apparently, judging by sales prices.

I like to pay attention to the language used. It used to be all about building houses, then homes, so flats count in the figures. I've noticed words like dwelling have crept in, i.e. HMOs for everyone, you might even need a mortgage for one.
 
6 months before our renewal is nearly upon us. I think ours is 30th June 2025, so I think I am correct in thinking we can start applying from 30th December? I will be looking to lock in the best rate I can asap in case rates rise obviously between now and summer 2025. Anything worth knowing or any advice greatly received. We have a very large balance outstanding as only got on the ladder 4.5 years ago. Was thinking of doing a 2 year fix this time in the hope rates will come down slightly by the end of that, or possibly go with a tracker. EDIT: Never remortgaged before. First timel.
 
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I can't see rates rising myself. I know the budget is going to stoke inflation. But at same time stifle growth.

I cannot see how raising rates will do any good. Surely inflation is going to fall as job security falls and people cut back on spending naturally.
 
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