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

[Axeman123]

12 minutes ago, Loki said:

Soul Trader 

Thinking some more that actually works, as in T&T traded their souls for material things or that emotionally connecting with their lodger will restore them. Plus the pun on Darren as a sole trader.

9 minutes ago, Wight Flight said:

'Till debt do us part?

Probably my favourite so far.

How about "On the tools" or "Love thy lodger"

[Loki]

1 minute ago, Axeman123 said:

Thinking some more that actually works, as in T&T traded their souls for material things or that emotionally connecting with their lodger will restore them. Plus the pun on Darren as a sole trader.

And Darren is a good 'un (So should probably be played by Idris Elba)

[Axeman123]

22 minutes ago, Loki said:

And Darren is a good 'un (So should probably be played by Idris Elba)

I was thinking of an all white crescent, with everyone but Darren being mega SJW. Halfway through the season his half-brother pops up, played by Idris Elba.

My final possible title: One foot on the property ladder

[Noallegiance]

Reboots are the way at the moment, so a new take on Keeping Up Apearances?

Last of the Landlords Whine

It Won't be Alright on the Night (rates breach 2%)

Howard's Way (overstretched himself)

 

 

[haroldshand]

See a lot of people on social medium forums, media and even the press are putting 2+2 together and coming up house price crash.

Years on ToS has taught me there is no sanity, commonsense or logic when it comes to the UK housing market, some need to be very careful

[Axeman123]

1 minute ago, haroldshand said:

See a lot of people on social medium forums, media and even the press are putting 2+2 together and coming up house price crash.

Years on ToS has taught me there is no sanity, commonsense or logic when it comes to the UK housing market, some need to be very careful

Surely the mania has been based on cheap money and sentiment. The first is going, and the second is following. 

[haroldshand]

10 minutes ago, Axeman123 said:

Surely the mania has been based on cheap money and sentiment. The first is going, and the second is following. 

Yep, money might is becoming a little more expensive 

[Bus Stop Boxer]

On 29/10/2021 at 00:47, swiss_democracy_for_all said:

If a house price crash were to ever happen, the banks would get left with a depreciating asset instead of the income from debt. Big enough crash and the bank goes bust, though as we saw, that’s no longer permitted. 

As @Lightscribe has related, they will turn those recent FOMO mortgagors, and quite a few more besides, in to tenants who have just put  down the biggest rental deposits in history.

So its the punters 20% deposit that gets melted, and the bank has thousands of captive tenants.

Who, in a stunning late twist, may also be responsible for upkeep. And freeholders bumming them on roof repairs.

Bought my first place in E17 in 94. I regularly came out the agents door, with half a pack of A4 paper printed up with repo properties.

The days when those hit Jo Schmo on the street, are never coming back.

[Bus Stop Boxer]

On 29/10/2021 at 09:31, Dave Bloke said:

We are moving office shortly and the new offices, for 450 staff, have no parking except for the directors. They won't even have secure cycle parking, which we have at present. My young colleagues all live in micro-apartments and commute by electric scooter so don't care much.

Do they have to generate their own lecky, on some sort of wheel arrangement as well?

[RJT1979]

3 hours ago, Bus Stop Boxer said:

As @Lightscribe has related, they will turn those recent FOMO mortgagors, and quite a few more besides, in to tenants who have just put  down the biggest rental deposits in history.

So its the punters 20% deposit that gets melted, and the bank has thousands of captive tenants.

Who, in a stunning late twist, may also be responsible for upkeep. And freeholders bumming them on roof repairs.

Bought my first place in E17 in 94. I regularly came out the agents door, with half a pack of A4 paper printed up with repo properties.

The days when those hit Jo Schmo on the street, are never coming back.

This will probably happen. Banks now happy to take on ownership and rent it back. But they obviously will only get less in rent than mortgage payment but I guess its still better as bank is now owner.

[XswampyX]

1 hour ago, RJT1979 said:

This will probably happen. Banks now happy to take on ownership and rent it back. But they obviously will only get less in rent than mortgage payment but I guess its still better as bank is now owner.

Not only that... They (The banks) set the base value.

So a two bedroom hovel in the open market is £100,000 but because of the interest rate rise it's now £50,000.

They have 1,000,000 mortgages on their books for £100,000 (actual real market value £50,000)

That equals a loss of 1,000,000 x £50,000 = £50,000,000,000 !!!

Or...

They just pay £100,000 for the hovel worth £50,000 and rent it out.

 

 

[Axeman123]

13 hours ago, Bus Stop Boxer said:

Bought my first place in E17 in 94. I regularly came out the agents door, with half a pack of A4 paper printed up with repo properties.

The days when those hit Jo Schmo on the street, are never coming back.

There are already auction properties on Rightmove/Zoopla, in a time of constrained supply. Sure, brown envelopes are probably still steering the best deals to spivs bypassing the open market. However I would assume that most spivs are going to be debt evangelists, and surely tightening credit will shut them down. When the floodgates open I can imagine auction properties outnumbering conventional sellers on the websites.

[Axeman123]

10 hours ago, RJT1979 said:

This will probably happen. Banks now happy to take on ownership and rent it back. But they obviously will only get less in rent than mortgage payment but I guess its still better as bank is now owner.

Surely they could just extend-and-pretend to keep the mortgage on their books, and avoid assuming a landlords legal obligations? Functionally the mortgagor would be near-as-damnit a tennant, but would retain all maintenance obligations. Maybe a hybrid model will be created by statute to facilitate this, a reversible hire-purchase agreement say, but surely that would keep everything stacked against the mortgagor. Further capital loss, maintenance: all on their head.

My money is still on jingle mail: people have bought properties they didn't like, in locations they didn't want, sometimes with partners they didn't intend to stay with long-term, with a massive sense of entitlement to speculative gains that dwarf their employment income. That may be hyperbole, but I just don't see those people meekly abandoning dreams of six-figure unearned untaxed gains for a life of drudgery renting a starter home until they leave it in a (slightly smaller) box.

[Axeman123]

9 hours ago, XswampyX said:

Not only that... They (The banks) set the base value.

So a two bedroom hovel in the open market is £100,000 but because of the interest rate rise it's now £50,000.

They have 1,000,000 mortgages on their books for £100,000 (actual real market value £50,000)

That equals a loss of 1,000,000 x £50,000 = £50,000,000,000 !!!

Or...

They just pay £100,000 for the hovel worth £50,000 and rent it out.

Surely that only works if they absorb every property that comes to market at that fantasy price? The alternative is people with no mortgage realising what's up and putting theirs on the market, and price discovery makes the lenders in your example insolvent. They would be attempting to maintain a price peg, which never works. Additionally I don't think it will take price falls to trigger selling, just an end to the widespread beleif that prices only go up. Without that you, at best, have a decaying asset that requires maintenance.

[spygirl]

2 hours ago, Axeman123 said:

Surely they could just extend-and-pretend to keep the mortgage on their books, and avoid assuming a landlords legal obligations? Functionally the mortgagor would be near-as-damnit a tennant, but would retain all maintenance obligations. Maybe a hybrid model will be created by statute to facilitate this, a reversible hire-purchase agreement say, but surely that would keep everything stacked against the mortgagor. Further capital loss, maintenance: all on their head.

My money is still on jingle mail: people have bought properties they didn't like, in locations they didn't want, sometimes with partners they didn't intend to stay with long-term, with a massive sense of entitlement to speculative gains that dwarf their employment income. That may be hyperbole, but I just don't see those people meekly abandoning dreams of six-figure unearned untaxed gains for a life of drudgery renting a starter home until they leave it in a (slightly smaller) box.

No.

Once a loan is in default, the rules on capital change.

Having failed loans is a no no for banks. That's why prices collapse when repos rise - banks have a very short time to get rid rid.

The extend n pretend of 2008, followed by covid, has created a massive problem overhang.

I mean, we are still getting mortgage prisoners whingers from 2008 ffs.

[HousePriceMania]

https://www.independent.co.uk/money/mortgage-interest-rates-rise-fix-variable-cheap-remortgage-b1949708.html

 

"The interest rate on UK mortgages expects to hit 14.8 per cent by the second quarter of 2023. "

Don't they mean 1.48%

 

https://www.ft.com/content/42299ac9-cb5b-47cb-8d9e-016f3c7c5c7b?segmentid=acee4131-99c2-09d3-a635-873e61754ec6

 

"UK lenders begin to raise mortgage rates despite BoE decision"

 

Nothing to do with Term Funding ending, nothing at all. 

[HousePriceMania]

The sound track to the housing bubble...

[Axeman123]

9 minutes ago, HousePriceMania said:

Nothing to do with Term Funding ending, nothing at all. 

Has that definitely happened? I seem to remember some debate on here about the status of it. If so they have expertly snuck that under the mainstream radar. Politicians are like a magician, "watch what this hand is doing, ignore the other one". 

[HousePriceMania]

38 minutes ago, Axeman123 said:

Has that definitely happened? I seem to remember some debate on here about the status of it. If so they have expertly snuck that under the mainstream radar. Politicians are like a magician, "watch what this hand is doing, ignore the other one". 

I think the consensus was it was ending 31st Oct.

Which coincides with the BoE stopping QE and the US tapering.

Nothing to see here.

[mh9000]

Isn’t increasing mortgage rates helpful for first time buyers (who’ve yet to buy)? That independent article seems to say otherwise?

Wouldn’t it mean prices have to come down as no one can afford the mortgage as they’d be limited by the monthly payments? Plus there might be a few more “motivated sellers”?

All the places I’ve looked and offered on at have gone to best and final offer, and ended up going for an extra 10%+ based on what agents have told me. I was prepared to just bite the bullet and buy accepting I’d possibly be there longer (and trigger the crash for everyone who’s been waiting  )

[HousePriceMania]

Just now, mh9000 said:

Isn’t increasing mortgage rates helpful for first time buyers (who’ve yet to buy)

Wouldn’t it mean prices have to come down as no one can afford the mortgage as they’d be limited by the monthly payments? Plus there might be a few more “motivated sellers”?

All the places I’ve looked and offered on at have gone to best and final offer, and ended up going for an extra 10%+ based on what agents have told me. I was prepared to just bite the bullet and buy accepting I’d possibly be there longer and trigger the crash for everyone who’s been waiting.

Luckily, Lloyds bank ( UK's biggets lender, pretty much THE housing market, John Lewis ( Now headed by an ex-banker) and Rishi Sunak's ex-employer Goldman Sachs have all entered the market as the wage multiples/affordbility for mortgages ( even with IRs at 0.1%)  to support it at all times ( therefore peak prices ).

Nothing to see here.

[HousePriceMania]

https://www.bankofengland.co.uk/-/media/boe/files/markets/term-funding-scheme-sme/operating-procedures.pdf

 

Extension of the TFSME 2.9 The Bank announced a six month extension to the TFSME on 17 December 20207 (the TFSME Extension). The changes affect both the TFSME Drawdown Period and the Reference Period as follows: i) The extended TFSME Drawdown Period will run until 31 October 2021 (the Extended TFSME Drawdown Period). ii) The extended Reference Period will run from 31 December 2019 to 30 June 2021 (originally 31 December 2020). 2.10 As set out in the Market Notice dated 17 December 2020, all Participants will automatically be included in the TFSME Extension unless they opt out. 2.11 In order to opt out, an authorised signatory specified on the Authorised Signatory Evidence Form on behalf of a Participant should notify the Bank by e-mail to [email protected] by 26 February 2021 that they wish to opt out of TFSME Extension, and the Bank will send an e-mail (or other form of communication determined by the Bank) to the Participant confirming that the Participant has opted out of the TFSME Extension. 2.12 Any Participant that has opted out of the extension will not be able to drawdown after the end of the Original TFSME Drawdown Period (as defined in paragraph 4.2 below), and will not be required to provide data beyond the Original Reference Period (as defined in paragraph 3.9 below). 2.13 Any institution which has not been admitted to the TFSME by 26 February 2021 will not be able to opt out of the extension. 2.14 For the avoidance of doubt, Participants that want to participate in the extension are required to provide additional lending data to cover the Extended Reference Period in order to utilise the Extended TFSME Drawdown Period.

 

There has been no extension to this date that I can see.

Given Term Funding is THE driver of the low mortgage/savings rates then would imply banks now need to raise savings rates to attract money ( therefore mortgage rates ) and/or raise money on the open money markets.

What is not clear to me is how much TF money the criminal bankers are sat on unlent. Enough to keep them going till it's brought back I'd wager.

[Axeman123]

Boy, is it hard to find much online about the TFSME scheme. Much of what is out there is BoE word salad pdf documents. For such a massive scheme almost no commentary or editorial type stuff seems to be available.

From what I can make out this scheme only gives access to funding:

• based on the value of increased lending during the reference period (ended 30/6/21)
• at BoE base rate plus a scheme fee
• which must be drawndown during the Drawdown period (ended 31/10/21)
• and is only for a maximum period of four years.

I could well be wrong, but surely the incentive to increase lending to secure cheap borrowing ended in June? The loans made up to the end of June would be priced based on TFSME funding, and drawing that down would just be a formality.

[HousePriceMania]

7 minutes ago, Axeman123 said:

Boy, is it hard to find much online about the TFSME scheme. Much of what is out there is BoE word salad pdf documents. For such a massive scheme almost no commentary or editorial type stuff seems to be available.

From what I can make out this scheme only gives access to funding:

• based on the value of increased lending during the reference period (ended 30/6/21)
• at BoE base rate plus a scheme fee
• which must be drawndown during the Drawdown period (ended 31/10/21)
• and is only for a maximum period of four years.

I could well be wrong, but surely the incentive to increase lending to secure cheap borrowing ended in June? The loans made up to the end of June would be priced based on TFSME funding, and drawing that down would just be a formality.

I think you could be right, it's all a bit..well...confusing.

The timing of the end of all this is intriguing.  I thought they'd extend it at budget time, but they didn't.

so,

1) Term Funding, gone

2) Mortgage rates going up

3) Help To Buy to end in 2023 

4) US taper

5) BoE being slated by the City

6) Inflation

7) House prices at all time high multiples with IRs at 0.1% and therefore extreme prices

8) All time low properties available to buy

 

Has there ever been a worse time to buy a house as a FTB or over-stretched debt monkey.

 

[Option5]

On 31/10/2021 at 01:49, XswampyX said:

Not only that... They (The banks) set the base value.

So a two bedroom hovel in the open market is £100,000 but because of the interest rate rise it's now £50,000.

They have 1,000,000 mortgages on their books for £100,000 (actual real market value £50,000)

That equals a loss of 1,000,000 x £50,000 = £50,000,000,000 !!!

Or...

They just pay £100,000 for the hovel worth £50,000 and rent it out.

 

 

Surely they'd have to get an independent valuation like the person who wanted a mortgage from them to buy it did.

Otherwise what's to stop them setting the price at £500,000 and having a nice big asset on their  books?