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Property crash, just maybe it really is different this time


haroldshand

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3 hours ago, Inque said:

If you have a mortgage in principle is that based on a rate fixed for a period of time?

Are we seeing a rush to get a house now before that offer ends and a higher rate is applied?

 

Banks have no principles.

MIP means you are just higher up the paper stack.

Banks can and do pull offers.

Mortgage rate gets set when mortgage is drawn.

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https://forums.moneysavingexpert.com/discussion/6367005/purchase-close-to-falling-through-due-to-mortgage-offer-expiry

Must be quite a few of these coming down the line. Certainly something to watch.

Funny that double the interest rate (must be 1.x%) gives a rise of £350pm.... must be borrowing a lot.

Imagine some of the very low sub 1% rates coming off...

I am sure the government are hoping that interest rates can do a quick up and down over the next couple of years to beat inflation which minimises people caught in traps like this, but if it goes on longer a lot of people will suffer.

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2 hours ago, Boon said:

https://forums.moneysavingexpert.com/discussion/6367005/purchase-close-to-falling-through-due-to-mortgage-offer-expiry

Must be quite a few of these coming down the line. Certainly something to watch.

Funny that double the interest rate (must be 1.x%) gives a rise of £350pm.... must be borrowing a lot.

Imagine some of the very low sub 1% rates coming off...

I am sure the government are hoping that interest rates can do a quick up and down over the next couple of years to beat inflation which minimises people caught in traps like this, but if it goes on longer a lot of people will suffer.

Yes an “easy” (fast grant of probate, empty and SSTC on second day of advertising) probate sale on my mums house is now approaching 4 months. Apparently 6month till completion is now common

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On 20/06/2022 at 23:57, HousePriceMania said:

No more boom and bust.....couldn't make it up

 

 

Their proposition is half right.

There will never be another proper housing 'bust' in the UK again, but there'll be plenty more 'booms'.

The British political establishment and the Bank of England will do absolutely everything within their powers to stop the UK property market deflating.

Edited by tank
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19 minutes ago, tank said:

Their proposition is half right.

There will never be another proper housing 'bust' in the UK again, but there'll be plenty more 'booms'.

The British political establishment and the Bank of England will do absolutely everything within their powers to stop the UK property market deflating.

Thumbs up from me. Until it doesn’t. Then I laugh. 

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I was chatting to a friend earlier, they are buying a new build and the developer keeps pushing the date back. They need to complete before mid September, same date his mortgage offer expires.

He mentioned that if he needs to get a new mortgage offer, it will be an extra £300pm as the rates have gone up. He's desperate to complete on time, if not he won't be able to afford to buy.

Interesting on many levels, firstly this highlights the a lag between rates going up, and mortgage offers expiring, but also peoples behavior. It would never occur to my friend that if the mortgage is £300pm more, perhaps the price of houses will drop accordingly, and sitting tight for another year isn't such a bad thing.

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The idiotic thinking is that if they don't complete soon, in a few months the price of the property will be more expensive.

They think that because that's how its gone in the last decade, but that was in a period of gradually lower interest rates and also people not facing a squeeze on their incomes. Both of these factors are reversed this time around.

A lot of people know this but choose to say nothing to correct the assumption, casually trotting out the line that it is a sellers market without even enquiring where the property is or what type. 

A fair proportion of the population have turned into cunts, self-interest basically trumping any type of integrity. Happy for others to be bagholders if it improves their lot. 

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stop_the_craziness
On 20/06/2022 at 10:44, Boon said:

Question is will there be something to replace it?

Of course:

New zero-deposit first-time buyer mortgage touted as Help to Buy alternative (msn.com)

This loan is paid back on an interest-only basis and the capital amount doesn’t have to be repaid until the buyer finally sells their property, hopefully for a profit

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4 hours ago, Boon said:

The idiotic thinking is that if they don't complete soon, in a few months the price of the property will be more expensive.

They think that because that's how its gone in the last decade, but that was in a period of gradually lower interest rates and also people not facing a squeeze on their incomes. Both of these factors are reversed this time around.

A lot of people know this but choose to say nothing to correct the assumption, casually trotting out the line that it is a sellers market without even enquiring where the property is or what type. 

A fair proportion of the population have turned into cunts, self-interest basically trumping any type of integrity. Happy for others to be bagholders if it improves their lot. 

Yes, people find it difficult to grasp "worth". They think it's something inherent now with the prices (as this is how the media portrays it), rather than the price being the outcome of what the most interested buyer was able to secure credit for. And so if people can only pay £300 less a month due to high rates and other inflation, the real achievable price immediately changes. The problem now is that sellers and buyers may have a stand-off as sellers refuse to drop prices. To clear the market I hope the banks are merciless with the first sign of arrears.

 

Rent is an interesting one - just got a rent increase, almost certainly as the LL has had a letter from the bank about a rise. I suspect up and down the country they think that the increased costs will naturally be paid for by the renter - going to be a big shock for many!

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'Combination of innnovative finance and technology' = sounds like a venture capital disaster to me.

Put yourself in the backers position, in what way will they turn a profit? Doesn't make much sense for them to go to the trouble of finding these undervalued places when the company get to share in none of the capital appreciation. 

Kind of implies to me that the interest rate charged would have to be higher than competitors to compensate for the exposure. Or some kind of plethora of high fees.

 

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On 23/06/2022 at 10:31, snaga said:

I was chatting to a friend earlier, they are buying a new build and the developer keeps pushing the date back. They need to complete before mid September, same date his mortgage offer expires.

He mentioned that if he needs to get a new mortgage offer, it will be an extra £300pm as the rates have gone up. He's desperate to complete on time, if not he won't be able to afford to buy.

Interesting on many levels, firstly this highlights the a lag between rates going up, and mortgage offers expiring, but also peoples behavior. It would never occur to my friend that if the mortgage is £300pm more, perhaps the price of houses will drop accordingly, and sitting tight for another year isn't such a bad thing.

Blimey rates must have moved a bit?

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7 minutes ago, Ash4781b said:

Blimey rates must have moved a bit?

£300pm is equivalent to 1.5% on a £240K mortgage

Edited by snaga
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HousePriceMania
15 minutes ago, snaga said:

£300pm is equivalent to 1.5% on a £240K mortgage

As a rough guide, used to be pre-2007 £100K of mortgage would cost £600-£650 pcm

You can seemingly still get a £100,000 with a discounted mortgage for £480 including fees  to £700 pcm worse case, that's with a 10% deposit.

Debt is still cheap.

 

 

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