Property crash, just maybe it really is different this time

[Boon]

Sad to say but is it really that wrong a decision?

You could probably pick up that type of house for c.£100k in some locations, borrowing at historically low rates.

Prices can rise on the overall indices by means of the more expensive areas falling, and the cheaper areas gaining.

Given the levelling up agenda I would not be surprised if the government splash the cash by putting nonsense jobs into poorer areas.

[Noallegiance]

End for rock bottom home loans: Lenders pull 500 mortgages from sale in a month and average rates on two-year fixes hit a SEVEN year high (msn.com)

[Boon]

Heard all this stuff before.

Article says some big words but then goes down to a table showing sub-2% mortgages. 

The crash has always been perpetually around the corner due to tighter conditions, but those tighter conditions never arrive - is it gonna be the same this time around?

Perhaps it may be different, as additional fuel/food costs haven't truly started to bite just yet for most households.

 

[spygirl]

3 hours ago, Boon said:

Heard all this stuff before.

Article says some big words but then goes down to a table showing sub-2% mortgages. 

The crash has always been perpetually around the corner due to tighter conditions, but those tighter conditions never arrive - is it gonna be the same this time around?

Perhaps it may be different, as additional fuel/food costs haven't truly started to bite just yet for most households.

 

The rate at which low rates are being withdrawn and the rate at which mortgage rates are rising is pretty eye watering.

 

[Noallegiance]

Ministry for Information hard at work today:

Home buyers could get bigger mortgages as the Bank of England may relax affordability tests, but how can you increase your chances now? (msn.com)

[Boon]

That's old news I think, way pre-dating the Ukraine/Russia thing.

Given the chances of really high energy bills, inflation and thus the chance of the interest rate being much higher in a few years, it doesn't sound prudent. After all it is the banks that are owning the properties. 

We might get some more of the meaningless news in a few days, if you want to be sensationalist a 0.25% increase in the base rate will equal mortgage rates going up by c.20% on a pure percentage rate. However to the average homeowner that simply means another £30 or something.

I do have hope that somewhere along the line we get the straw that breaks the camels back and a bear market in housing to emerge. But sentiment of the masses is still postive.

I still think that's what the government wants. Let someone have a 1% increase in their house value every year while inflation is much bigger. The average thickness will mean that they will think government are doing a great job 'protecting' their wealth.

[spygirl]

1 hour ago, Noallegiance said:

Ministry for Information hard at work today:

Home buyers could get bigger mortgages as the Bank of England may relax affordability tests, but how can you increase your chances now? (msn.com)

Yep, being doing the rounds for ages.

Its not bigger mortgages, its just mortgages.

They are on about dropping the IR stress test - current rates + 3%

The way its going that 3% will be put on mortgages.

 

 

[HousePriceMania]

1 hour ago, spygirl said:

Yep, being doing the rounds for ages.

Its not bigger mortgages, its just mortgages.

They are on about dropping the IR stress test - current rates + 3%

The way its going that 3% will be put on mortgages.

 

 

Im predicting 5% mortgage rates by end of 2022 

[Wight Flight]

17 minutes ago, HousePriceMania said:

Im predicting 5% mortgage rates by end of 2022 

Aren't they already at that rate of you don't have a stonking deposit?

[mh9000]

Quick check on the comparison site and seems to be around 2% for a 2 year fix based or 1.5% variable on 90% LTV at the minute, assuming you’d actually get these. You reckon they’ll more than double?
If it causes prices to drop then bring it on.

52 minutes ago, HousePriceMania said:

Im predicting 5% mortgage rates by end of 2022 

[HousePriceMania]

2 hours ago, mh9000 said:

Quick check on the comparison site and seems to be around 2% for a 2 year fix based or 1.5% variable on 90% LTV at the minute, assuming you’d actually get these. You reckon they’ll more than double?
If it causes prices to drop then bring it on.a

Apr after fees? 

[wherebee]

https://www.news.com.au/finance/work/at-work/brutal-way-bettercom-workers-discovered-they-had-been-laid-off/news-story/

*lehman type noises intensify*

[Boon]

12 hours ago, mh9000 said:

Quick check on the comparison site and seems to be around 2% for a 2 year fix based or 1.5% variable on 90% LTV at the minute, assuming you’d actually get these. You reckon they’ll more than double?
If it causes prices to drop then bring it on.

At present I reckon we're only looking at 3% at end of 2022. But if there are more rate hikes I don't think it's out of the question.

What might be interesting is that some people will be in a trap as SVRs may be over 5%. Some who bought in London or South East in the last few years may have had a very low rate of 1.x% then increasing to over 5%. In recent times you could remortgage, but if the increased interest rates cause even a modest tumble in prices the LTV may no longer hold.

A lot of ex-new build flats for instance have quite easily lost 10% of their new values, so the highly leveraged are most at risk. 

So the scene is set for some forced sales, I don't think we're quite there yet. Should the base rate go back to 4% the pain would be widespread, try putting in the figures into a mortgage calculator. Question is, what kind of props will come in.

[spygirl]

13 hours ago, Wight Flight said:

Aren't they already at that rate of you don't have a stonking deposit?

Not far off.

Again, 2 hurdles  -

1) Majority of LTE less than 4.5 household income (minus regular spend)

2) Mortgage payments to take no more than ~30% of household income.

3) Still pass 2) if rates go up 3%.

 

3) is minor.

1) is the biggy.

 

[spygirl]

13 hours ago, mh9000 said:

Quick check on the comparison site and seems to be around 2% for a 2 year fix based or 1.5% variable on 90% LTV at the minute, assuming you’d actually get these. You reckon they’ll more than double?
If it causes prices to drop then bring it on.

You need to be looking at the SVR not the teaser rates. And for the 20% deposit.

https://moneyfacts.co.uk/mortgages/

 

4.9% currenty

 

[Boon]

A good forward indicator:

https://www.mumsnet.com/Talk/am_i_being_unreasonable/4500141-Surely-they-can-t-expect-us-to-pay-240-per-month-for-power

Increased power bills haven't even hit yet for most of them, I suspect some are oblivious. 

A 1% mortgage rise could be equivalent to the average mortgage price hike, so if the rike hikes stay with projections there may be quite a lot of people facing this as well.

[spygirl]

24 minutes ago, Boon said:

A good forward indicator:

https://www.mumsnet.com/Talk/am_i_being_unreasonable/4500141-Surely-they-can-t-expect-us-to-pay-240-per-month-for-power

Increased power bills haven't even hit yet for most of them, I suspect some are oblivious. 

A 1% mortgage rise could be equivalent to the average mortgage price hike, so if the rike hikes stay with projections there may be quite a lot of people facing this as well.

Ah.... mumsnet mindset - 

Just read Martin Lewis’s latest email and it’s predicting average bills of £2900 per year!! Surely the government will need to step in and subsidise this cost. Our current bill is about 100 per month, and this just seems untenable for the vast majority

Subbed job.

Subbed childcare.

Subbed housing.

Subbed power.

And where does the sub come from, UK not being Saudi.

[spygirl]

Obs infiltrated by a 'man' -

Erm, but if the government subsidies the people who pays? The tax payer. Who is the tax payer? The people!!

[Frank Hovis]

2 minutes ago, spygirl said:

Ah.... mumsnet mindset - 

Just read Martin Lewis’s latest email and it’s predicting average bills of £2900 per year!! Surely the government will need to step in and subsidise this cost. Our current bill is about 100 per month, and this just seems untenable for the vast majority

Subbed job.

Subbed childcare.

Subbed housing.

Subbed power.

And where does the sub come from, UK not being Saudi.

 

Yes if we were talking about subsidy but electricity bills are about double what they should be because of the green levy and there is VAT on the bills.

The government could make energy bills much cheaper not by giving out subsidy but rather by not loading them with the costs of its green vanity projects.

Stop the green energy projects and energy prices for UK consumers would fall drastically.

[spygirl]

Just now, Frank Hovis said:

 

Yes if we were talking about subsidy but electricity bills are about double what they should be because of the green levy and there is VAT on the bills.

The government could make energy bills much cheaper not by giving out subsidy but rather by not loading them with the costs of its green vanity projects.

Stop the green energy projects and energy prices for UK consumers would fall drastically.

Shoot the LibDems!

 

With high Oil n gas prices, you cna argue there is no need for a green levy.

 

[tank]

32 minutes ago, Boon said:

A good forward indicator:

https://www.mumsnet.com/Talk/am_i_being_unreasonable/4500141-Surely-they-can-t-expect-us-to-pay-240-per-month-for-power

Increased power bills haven't even hit yet for most of them, I suspect some are oblivious. 

A 1% mortgage rise could be equivalent to the average mortgage price hike, so if the rike hikes stay with projections there may be quite a lot of people facing this as well.

Canary in the coalmine.

Mumsnet is going to get very bitchy as these bills hit and the stark difference between Polly with a City banker/lawyer hubby and the rest becomes glaringly obvious.

You have women on there leading middle class lifestyles on bennies. A big hike in power bills is going to mean belt tightening for all those without family wealth and/or a high earning hubby.

[spygirl]

6 minutes ago, tank said:

Canary in the coalmine.

Mumsnet is going to get very bitchy as these bills hit and the stark difference between Polly with a City banker/lawyer hubby and the rest becomes glaringly obvious.

You have women on there leading middle class lifestyles on bennies. A big hike in power bills is going to mean belt tightening for all those without family wealth and/or a high earning hubby.

Depends if Mr Polly works for a Russian...

There is a fair bit of Russain money sluhsign around London.

Not Labour - 'corrupt Tories! scum!!!!' stuff.

Its  middle classy lawyers, accountants and bag carryers.

 

8 minutes ago, tank said:

Canary in the coalmine.

Mumsnet is going to get very bitchy as these bills hit and the stark difference between Polly with a City banker/lawyer hubby and the rest becomes glaringly obvious.

You have women on there leading middle class lifestyles on bennies. A big hike in power bills is going to mean belt tightening for all those without family wealth and/or a high earning hubby.

Besides, ist a not a big hike.

You are talking 100, 200 extra a month for most.

Piss in the ocean.

How in fuck were they going afford mortgage rates going to 6%-7%???

[tank]

1 minute ago, spygirl said:

Depends if Mr Polly works for a Russian...

There is a fair bit of Russain money sluhsign around London.

Not Labour - 'corrupt Tories! scum!!!!' stuff.

Its  middle classy lawyers, accountants and bag carryers.

 

True.

Although I suspect that Russian money has been expertly 'laundered'.

Given the number of 'terrified' ladies on the above thread and calls for big daddy government to step in, I suspect it'll be Shaz and Karen on UC who'll be hardest hit. Bennies have been effectively frozen.

[spygirl]

18 minutes ago, tank said:

True.

Although I suspect that Russian money has been expertly 'laundered'.

Given the number of 'terrified' ladies on the above thread and calls for big daddy government to step in, I suspect it'll be Shaz and Karen on UC who'll be hardest hit. Bennies have been effectively frozen.

Expertly or not, it sure aint Cockernays buying in London.

Or West Londoners. Or South Londoners ...

London property has been lurching slowly down for a several years. On very low number of sales.

 

 

 

[Boon]

51 minutes ago, spygirl said:

Depends if Mr Polly works for a Russian...

There is a fair bit of Russain money sluhsign around London.

Not Labour - 'corrupt Tories! scum!!!!' stuff.

Its  middle classy lawyers, accountants and bag carryers.

 

Besides, ist a not a big hike.

You are talking 100, 200 extra a month for most.

Piss in the ocean.

How in fuck were they going afford mortgage rates going to 6%-7%???

That's not the end of it really.

By end of year food might be up 20-25% - for families maybe equivalent to the heating cost rise.

Hilariously there are some on there who think it'll be good for house prices because nobody could afford to sell. I don't see it that way.

I do think it's handy for the government really - they can deflate a bit of the price bubble and it can be blamed on other things. A decline in house prices without a war would be unpopular with the masses.