Mortgages are ALREADY getting more expensive...biggest interest payments hike since the financial crisis

[HousePriceMania]

1 hour ago, Wight Flight said:

It is interesting seeing just how tight some people's finances are.

On my 'Christ I am about to be homeless' facebook group you very often get people saying they are being kicked out next month and need somewhere, max £750 a month. Someone will post as link to somewhere at £780 and they will nearly always say 'we just can't stretch to that'

The other one I am seeing is people posting they can afford say £800, or £850 if it is absolutely the right location so they can walk to work.

Things are very highly strung already. There is no real room for rent increases.

I know no end of seemingly well off "middle class" people do nothing but moan about how skint they are.

The only ones I dont seem to complain is the one who's mum bought them a house and he went full on furlough rich.

[Harley]

I spent time with a one man property developer.  He knowingly said to always keep some cash for the times others don't.  It was a while ago mind you!

[Boon]

Mumsnet also has a thread for how much you have after a month:

TBH if you have dual earners then it should be quite comfortable as long as you haven't bought the most expensive house possible.

It is clear that many bill increases (ie electric, food, mortgage) are actually still yet to bite fully. So by the time we get to the summer next year, if base rate is 0.5% then it could easily be that people need an extra £200+ to get the same stuff.

[King Penda]

1 hour ago, Harley said:

I spent time with a one man property developer.  He knowingly said to always keep some cash for the times others don't.  It was a while ago mind you!

Yes the card readers all failed at b and m this afternoon no tap and go and puting your card in failed has well the place was gridlocked .they shouted out at another till cash only and just 2 of us shuffled over the rest were looking at each other looking puzzled .best of it was I’d only bought gravey granules about 10 containers of it .

[HousePriceMania]

29 minutes ago, Boon said:

as long as you haven't bought the most expensive house possible.

 

Have you been on mumsnet ?

[haroldshand]

Well it's taken just short of 20 years but ToS just might be in with a shout at last and the great property crash is now at last under way, early stages of course.

But with inflation on it's way also and much higher than the BOE predicts IMO I think assets and houses in particular could well be a safe haven for those with cash and hold the market up, time will tell.

[Wight Flight]

1 hour ago, haroldshand said:

Well it's taken just short of 20 years but ToS just might be in with a shout at last and the great property crash is now at last under way, early stages of course.

But with inflation on it's way also and much higher than the BOE predicts IMO I think assets and houses in particular could well be a safe haven for those with cash and hold the market up, time will tell.

BTL sets the house prices.

If incomes are squeezed there will be less available for rent.

But if interest rates go up landlords will need to increase rent.

There could be a lot of homeless people, and a lot of rental voids.

Except this won't happen. .gov will just increase LHA to avoid it.

[spygirl]

22 hours ago, Wight Flight said:

My understanding was that banks make more profit at lower interest rates.

No, banks make  money are higher rates.

They need the spread.

It's why BoE is having to do termfubning for banks as the banks just cannot survive.

[Wight Flight]

11 minutes ago, spygirl said:

No, banks make  money are higher rates.

They need the spread.

It's why BoE is having to do termfubning for banks as the banks just cannot survive.

It is more nuanced than that, and depends on how much short and fixed rate long term borrowing and lending they have.

https://www.frbsf.org/economic-research/publications/economic-letter/2021/august/how-do-low-and-negative-interest-rates-affect-banks/

[spygirl]

13 hours ago, Lightscribe said:

The ingredients are all there alright, but I don’t think it’s a long way off, in fact I think we could be closer than a gnats cock.

Forget about up north where houses are still relatively affordable. The focus heat map of this is in the London suburbs. Most terraced 2/3 post war houses have risen from £30k in the late 80’s to £600-700 mark today which is around 25 times. Added on to that the concentration of over leveraged BTL debt is magnified around city centres for housing HMO’s within the last decade.

So all in all the over leveraged city areas is very sensitive to even the slightest IR rises. The BTL brigade think they can pass on the increases on to the renters. Nope. The market sets the rates, and cost of living inflation hitting the low paid will just mean more and more voids. London is the rolling stone that gathers no moss and it already started rolling when the city workers retired, left or simply sold up to move to the coast over the pandemic. What happens there will ripple out like a shockwave in the UK, but the same will be happening globally.

Basically we’re about 20 years too late of saving our economy when we decided to sell off the family silver in the name of short term profit and cheaper goods instead of investing in the infrastructure and the resilience of the country. We decided to centre our economy on HPI and low IR rates forever while putting the squeeze anyone who actually worked and paid taxes.

This 40 year disinflation cycle has been a long one and the unraveling won’t be pretty. The unfolding seems slow until it isn’t. 

Iirc 80% of owner occupier io mortgages are London/SE.

These are the problematic unresolved 50%.

The io mortgage holder should have sold up 6 years ago.

Covid/working from home/filling London up with migrants/voting Labour is going to see London housing crash n burn.

[spygirl]

8 hours ago, Axeman123 said:

All this talk of institutional landlords ignores one thing, in my opinion. What corporate wants to manage a large number of high mileage houses of differing ages and construction details, with decades of accumulated alterations and bodges?

Purpose built blocks of identical units, with a maintenance contract and assorted gaurantees bundled together by the developer, are a very different kettle of fish. That would allow economies of scale, eg picture the situation with gas boilers and central heating systems. 600 identical systems in one location, vs 600 random ex Furgus Wilson wrecks. Institutional landlords may even move towards more temporary structures, and plan to replace buildings on the same site every few decades with ones that meet new standards rather than get bogged down in major refurbs and updates.

None.

 

[spygirl]

12 hours ago, Lightscribe said:

I think that anecdotal sums up the ‘you will own nothing’ future nicely.

A return to serfdom under neo-feudalism dressed as progressive socialism. The cherry on the cake was that the indoctrination of the plebs was so perfect they placed it all upon themselves.

 

Cant have that and democracy.

[spygirl]

8 hours ago, Wight Flight said:

Agreed.

This is how it is done in the US and it is bloody brilliant.

https://www.broadmoor.cc/

I'll have a lease without a pool. I'm prepared to walk to the leisure centre for a swim.

[spygirl]

8 hours ago, Frank Hovis said:

 

That was the same with the particular examples cited down here during the summer.

People had arranged their finances precisely, tailoring jobs to rent and outgoings to maximise the life part if the work / life balance. Which is absolutely fair enough - if you're near a beach then you want to have the time to take your kids to it.

This had worked perfectly well for decades.

Then suddenly this summer rents on a reasonable three bed in a seaside town jumped from £700 / £750 to £1,000 / £1,100.

Leaving people with the option of earning another £450 a month, easier said than done, or going inland and eastward for the cheaper rents; uprooting the children from their schools and the family from its social circles.

I'm surprised that there wasn't more anger.

More so since TCs/UCs which seemed designed for tourists towns - let UCs take the strain, get a 16h job for DSS hoop jumping, then get another couple of cash in hands for an extra 500/m tax free in summer.

 

[Wight Flight]

1 hour ago, spygirl said:

I'll have a lease without a pool. I'm prepared to walk to the leisure centre for a swim.

It's in America.

You will have a very, very long walk.

[Axeman123]

Another day, another cheerful headline...

https://www.telegraph.co.uk/personal-banking/mortgages/homeowners-will-see-mortgage-rates-double-within-months/

Headline:

Mortgage rates will ‘double within months’

Rises would be ‘catastrophic’ for homeowners, warn mortgage brokers

[Boon]

Rises would only be bad for those who have a combination of little savings and high leverage. It seems that the papers are choosing the cladding route of reporting - take the worst case scenario and pretend that it applies to everyone.

The next step would be getting some stories, usually featuring a pretty lady, saying how it is so bad and they can't sleep at night. Not there yet.

Actually thinking Sunak's budget comment of there being limits to governments could be linked to this - it would be quite an unsavoury situation if some homes were hit with a double whammy of big power rises and mortgage cost rises next year.... instead of people hunkering down or seeking to up their incomes the calls would be for government to bail them out in some way.

[With a crooked smile]

On 29/10/2021 at 06:49, Axeman123 said:

would still make mortgages from the low interest rate era punishing to service.

7.5k tax free rent a room goes a long way to resolving any interest hike issues. Improvise, adapt, and overcome. 

[Axeman123]

40 minutes ago, With a crooked smile said:

7.5k tax free rent a room goes a long way to resolving any interest hike issues. Improvise, adapt, and overcome. 

A lot of very ordinary people have gotten a false image of themselves as wealthy, special, above the majority of people around them. PCP Mercedes/Audi, HTB shoebox "detached" "house", a holiday in Dubai etc. I cannot imagine the horror for them of taking in a lodger, especially if they had to "settle" for one of the very type of people they have been imagining themselves to be better than! 

[Loki]

10 minutes ago, Axeman123 said:

A lot of very ordinary people have gotten a false image of themselves as wealthy, special, above the majority of people around them. PCP Mercedes/Audi, HTB shoebox "detached" "house", a holiday in Dubai etc. I cannot imagine the horror for them of taking in a lodger, especially if they had to "settle" for one of the very type of people they have been imagining themselves to be better than! 

It's going to be fucking delicious when that delusion bubble pops, never mind the financial bubbles 

 

[Axeman123]

Just now, Loki said:

It's going to be fucking delicious when that delusion bubble pops, never mind the financial bubbles 

I might try writing a sitcom, based on my previous post. Imagine: Darren the self-employed tradesman lodging with Tarquin and Tara in their 4-bed slave box. "a white van on the crescent!". Tara can't help flicking her hair around Darren, Tarquin desperately tries to assert himself by shoe-horning his Communications Bsc and having stayed at the Burj al Arab into every conversation. For the show to work Darren would have to have a heart of gold unfortuneatly. Picture Darren pulling a wedge of 50s out when he hears about them only having 50 to last the month after all the DDs go out etc. Think of a mixture of Only fools and The Good Life. I just need a title...

[Wight Flight]

4 minutes ago, Axeman123 said:

I might try writing a sitcom, based on my previous post. Imagine: Darren the self-employed tradesman lodging with Tarquin and Tara in their 4-bed slave box. "a white van on the crescent!". Tara can't help flicking her hair around Darren, Tarquin desperately tries to assert himself by shoe-horning his Communications Bsc and having stayed at the Burj al Arab into every conversation. For the show to work Darren would have to have a heart of gold unfortuneatly. Picture Darren pulling a wedge of 50s out when he hears about them only having 50 to last the month after all the DDs go out etc. Think of a mixture of Only fools and The Good Life. I just need a title...

Roger the Lodger?

[Loki]

5 minutes ago, Axeman123 said:

For the show to work Darren would have to have a heart of gold unfortuneatly.

 

Think of a mixture of Only fools and The Good Life. I just need a title...

Soul Trader 

[Axeman123]

2 minutes ago, Wight Flight said:

Roger the Lodger?

2 minutes ago, Loki said:

Soul Trader 

Only Spivs and Chancers was my best, probably better suited to one about an estate agent.

[Wight Flight]

8 minutes ago, Axeman123 said:

I might try writing a sitcom, based on my previous post. Imagine: Darren the self-employed tradesman lodging with Tarquin and Tara in their 4-bed slave box. "a white van on the crescent!". Tara can't help flicking her hair around Darren, Tarquin desperately tries to assert himself by shoe-horning his Communications Bsc and having stayed at the Burj al Arab into every conversation. For the show to work Darren would have to have a heart of gold unfortuneatly. Picture Darren pulling a wedge of 50s out when he hears about them only having 50 to last the month after all the DDs go out etc. Think of a mixture of Only fools and The Good Life. I just need a title...

'Till debt do us part?