Mortgage Rate Rises

delta0 said:
The market seizing up if what I expect will happen too. It happened last time.
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Yes, housing isn't the most liquid of markets and the transaction time is laughable. With fewer transactions it will be much harder to understand any falls or trust many figures. The only way you will know the impact to you is if you have to get a valuation for some reason (selling, buying, remortgaging) which are infrequent events if you want them to be!
 
potatolord said:
I think demand for build and renovations will drop off. That's what happened in previous housing crashes, and is a negotiating opportunity- not a guaranteed saving.

Materials costs are going up, and you can't do much about that.

My advice is find one (old!) trade, preferably a general builder, and get him to do introductions and help you set up trade accounts. Someone like that will save you both time and money.

Trying to juggle plumbers, builders, carpenters, electricians etc on a job is no fun. Don't be afraid to sack no shows!
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I found a trader that does a variety of things including plumbing and electrical work but I have a family friend that will do the rewire for me.

The trader I found is one that my missus sister uses for the last 5 years and she is a architecture so if she approves of him then he must be good lmao.

He was fully booked until March next year but I imagine with this news from our market, he will be having some free slots lol.

I did manage to squeeze him in for the majority of December though
 
We are stumped in terms of what to do in our situation - we planned to coincide a move at the end of our current fix (Feb 24) thus, we fixed for two years Feb this year (actually arranged about Oct 21). However, with rates predicted to be much higher at that point and a reduction in prices as outlined above, we are not sure whether to sell and rent in the meantime. Selling and renting would mean selling our current house in the peak and buying in the dip - the money spent in rent would be recovered from the money we would have potentially lost in a price drop but of course, that depends on whether house prices drop and by how much but even a 5% drop would potentially cover the money we'd spend in rent for 18 months.

Buying now means a much higher mortgage payment due to rates and the risk of a huge drop to add to the mix.

Decisions decisions.
 
jonneymendoza said:
I found a trader that does a variety of things including plumbing and electrical work but I have a family friend that will do the rewire for me.

The trader I found is one that my missus sister uses for the last 5 years and she is a architecture so if she approves of him then he must be good lmao.

He was fully booked until March next year but I imagine with this news from our market, he will be having some free slots lol.

I did manage to squeeze him in for the majority of December though
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Perfect.

A reliable trade is worth paying for. They save you so much time and hassle.

Our carpenter turned up one day with 300 second-hand Welsh slates that were being unloaded as he arrived at the builders merchant. He knew we were doing the kitchen roof, so grabbed them for us when he saw them. £1 each- that saved us about £1,000!
 
Chris344 said:
We are stumped in terms of what to do in our situation - we planned to coincide a move at the end of our current fix (Feb 24) thus, we fixed for two years Feb this year (actually arranged about Oct 21). However, with rates predicted to be much higher at that point and a reduction in prices as outlined above, we are not sure whether to sell and rent in the meantime. Selling and renting would mean selling our current house in the peak and buying in the dip - the money spent in rent would be recovered from the money we would have potentially lost in a price drop but of course, that depends on whether house prices drop and by how much but even a 5% drop would potentially cover the money we'd spend in rent for 18 months.

Buying now means a much higher mortgage payment due to rates and the risk of a huge drop to add to the mix.

Decisions decisions.
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I suspect there a lot of people in this situation right now and it will be a very difficult decision to make. Just how much it crashes will make or break that.
 
fez said:
There was a Twitter thread posted earlier in this thread explaining how you cannot just compare headline rates. 15% that all our parents speak of is similar to what 5-6% would be now based on mortgage size to earnings etc.
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That may be the case in terms of mortgage affordability.

But in terms of sensible long term interest rates, prior to the collapse to zero in the wake of the credit crunch......4-5% is completely normal.
 
Chris344 said:
We are stumped in terms of what to do in our situation - we planned to coincide a move at the end of our current fix (Feb 24) thus, we fixed for two years Feb this year (actually arranged about Oct 21). However, with rates predicted to be much higher at that point and a reduction in prices as outlined above, we are not sure whether to sell and rent in the meantime. Selling and renting would mean selling our current house in the peak and buying in the dip - the money spent in rent would be recovered from the money we would have potentially lost in a price drop but of course, that depends on whether house prices drop and by how much but even a 5% drop would potentially cover the money we'd spend in rent for 18 months.

Buying now means a much higher mortgage payment due to rates and the risk of a huge drop to add to the mix.

Decisions decisions.
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I would stay put really. We were looking to move last year and it was a 50k upgrade now we are looking 100-150k for the same upgrade. Just not worth the risk. Better to wait it out and see what happens.

I really doubt prices will go back to 2010 levels but even if they went back a couple of years it would mean remortgaging for a lot less.
 
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Chris344 said:
We are stumped in terms of what to do in our situation - we planned to coincide a move at the end of our current fix (Feb 24) thus, we fixed for two years Feb this year (actually arranged about Oct 21). However, with rates predicted to be much higher at that point and a reduction in prices as outlined above, we are not sure whether to sell and rent in the meantime. Selling and renting would mean selling our current house in the peak and buying in the dip - the money spent in rent would be recovered from the money we would have potentially lost in a price drop but of course, that depends on whether house prices drop and by how much but even a 5% drop would potentially cover the money we'd spend in rent for 18 months.

Buying now means a much higher mortgage payment due to rates and the risk of a huge drop to add to the mix.

Decisions decisions.
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I think selling to rent is foolish in any situation, its essentially gambling. You need house prices to fall otherwise you are in a much worse position.
 
adam cool dude said:
I would stay put really. We were looking to move last year and it was a 50k upgrade now we are looking 100-150k for the same upgrade. Just not worth the risk. Better to wait it out and see what happens.
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There is a level of self correction tho - e.g. I got £75k more for my house (3 years ownership) than I paid, yet the house I bought was +£120k on the neighbors house - so net risk in my man maths is £45k. If the market drops below pre-COVID numbers then things will be tight, but the thing is - whilst the overall picture based on averages is poor, there are net-more wealthy people than ever before. Especially with generational wealth/financial instruments we never had before.
 
CapitalOne said:
Yes, housing isn't the most liquid of markets and the transaction time is laughable. With fewer transactions it will be much harder to understand any falls or trust many figures. The only way you will know the impact to you is if you have to get a valuation for some reason (selling, buying, remortgaging) which are infrequent events if you want them to be!
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And you can't even trust those valuations that much, only physically finding a buyer is the true price.
 
Ugley_Matt said:
Trying to figure out if a 10 year fix at 4.09% is a good deal. Interest rates are going to rise in the short term, but are they likely to come down as quickly.
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A lot will depend how long the Ukraine war continues as this is primarily the driver of these issues.
 
mid_gen said:
'Very high rates'. I'm guessing you're a bit younger than me.....so maybe you don't know any different. I mean, I was too young to care too much last times rates were that at that level, but I was aware of it.

5%? Normal rates. Rates that keep a lid on house price inflation, and reward savers.
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I thought the same

Problem is people fail to quantify. I don't think many genuinely see 5% as a high rate. But as soon as its put into a mortgage context its "high"

But, for those with recent borrowings 5% is a comparatively high rate.

I cannot see personally a high volume and high percentage house price correction, certainly not medium term
However, I can see 40% in spiky peaks but with low volumes as a possibility. At those sorts of level only those forced to sell will do so (inc. repos) and as such its easy for a small volume of transactions (as tends to happen in a recession) to skew the numbers significantly.
Most people will hunker down and see it out.
 
Still houses coming on the market round here and the prices continue to go up. Although I have noticed they aren't selling anywhere near as fast. Partly time of year I guess, but cost of living crisis starting to bite too I suspect.
 
Ugley_Matt said:
Trying to figure out if a 10 year fix at 4.09% is a good deal. Interest rates are going to rise in the short term, but are they likely to come down as quickly.
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It's always a gamble, but that seems quite high for a fix. I'd have thought today is peak uncertainty.

Saying that, 12 months ago people would have thought fixing electric at 20p for 10 years would be madness.
 
Skilid said:
Once you get to 60% I don't think you get any better deals available. I've never seen anything lower than 60% at least, anyway.
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Yeah historically 60% LTV was a very safe position for lenders so really below that point their lending was basically safe.
If we see a significant impact on house prices, even if its somewhat on paper, then they could add a new break point, 50% or 40% even, with 60% still being risk loaded to some extent.
 
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