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

[mh9000]

1 hour ago, HousePriceMania said:

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.

 

Probably not, but can you see it ever improving? I’m rapidly losing hope. I’m seeing people scrambling to get somewhere half decent at stupid prices.

[Axeman123]

50 minutes ago, mh9000 said:

Probably not, but can you see it ever improving? I’m rapidly losing hope. I’m seeing people scrambling to get somewhere half decent at stupid prices.

Are they scrambling to complete, or just to make silly offers? From my research the effect of TFSME (Term funding) on mortgage rates has ended. Arguably it's biggest effect on stimulating lending will have ended four months ago, which might fit with more recent stories of down valuation. Swap rates that mortgage lenders use for funding are rising, and BoE seems certain to raise base rate sooner or later. Interestingly TFSME funds are charged BoE base rate (plus a scheme fee), and only last four years. I just can't see where mortgage lenders will get cheap funds to lend in future, unless we get some new wild government scheme.Higher mortgage rates = lower capital values. 

[spygirl]

48 minutes ago, Axeman123 said:

Are they scrambling to complete, or just to make silly offers? From my research the effect of TFSME (Term funding) on mortgage rates has ended. Arguably it's biggest effect on stimulating lending will have ended four months ago, which might fit with more recent stories of down valuation. Swap rates that mortgage lenders use for funding are rising, and BoE seems certain to raise base rate sooner or later. Interestingly TFSME funds are charged BoE base rate (plus a scheme fee), and only last four years. I just can't see where mortgage lenders will get cheap funds to lend in future, unless we get some new wild government scheme.Higher mortgage rates = lower capital values. 

Term funding reduces banks cost of capital and increases the amount of money they can lend.

Banks raise capital mainly via bonds. Bond yields have been depressed by BoE fkwittery.

Remove term funding n QE and it's a big jump.

 

[Wight Flight]

2 hours ago, Axeman123 said:

unless we get some new wild government scheme.

I wouldn't bet the house on that not happening.

[mh9000]

3 hours ago, Axeman123 said:

Are they scrambling to complete, or just to make silly offers? From my research the effect of TFSME (Term funding) on mortgage rates has ended. Arguably it's biggest effect on stimulating lending will have ended four months ago, which might fit with more recent stories of down valuation. Swap rates that mortgage lenders use for funding are rising, and BoE seems certain to raise base rate sooner or later. Interestingly TFSME funds are charged BoE base rate (plus a scheme fee), and only last four years. I just can't see where mortgage lenders will get cheap funds to lend in future, unless we get some new wild government scheme.Higher mortgage rates = lower capital values. 

yeah to be fair I've not got to the stage where they've completed, just been outbid... the EAs sound almost apologetic that these daft offers are being made and accepted.

I really hope you're right but as mentioned there always seems to be another scheme from somewhere.

[HousePriceMania]

15 hours ago, mh9000 said:

Probably not, but can you see it ever improving? I’m rapidly losing hope. I’m seeing people scrambling to get somewhere half decent at stupid prices.

Yes, of course it will improve, at some point.  

The trouble is that point might be after a whole lot of pain.

[Frank Hovis]

16 hours ago, mh9000 said:

Probably not, but can you see it ever improving? I’m rapidly losing hope. I’m seeing people scrambling to get somewhere half decent at stupid prices.

 

That may well be the sensible course of action given the government policies with regard to housing are:

- Keep house prices high and rising 

- Keep mortgage rates low 

- Do not attempt to control rents

 

If you buy now at stupid prices you immediately cease to pay rent and fall into the two categories that the government is determined to protect: a home owner and a mortgage payer.

Unless there is a crash in the very near future then every year you will save money on your mortgage versus your rent and every year your house will increase in value.

If the crash doesn't happen for at least ten years, if at all, then you win.

 

That to my mind is the way that is and you really should buy if you possibly can.

I don't like that it is this way, I really don't like that is this way, but the world is as it is rather than as we would wish it to be.

 

The above presupposes that if you aren't buying a house then you are holding the majority of your savings in cash deposits; and for 95% of people that is the case.

 

If however you're in an asset class that is outstripping house prices by an amount greater than or equal to your rent costs less mortgage less return on your likely deposit then sitting on your hands would be the better strategy.

[HousePriceMania]

47 minutes ago, Frank Hovis said:

 

That may well be the sensible course of action given the government policies with regard to housing are:

- Keep house prices high and rising 

- Keep mortgage rates low 

- Do not attempt to control rents

 

If you buy now at stupid prices you immediately cease to pay rent and fall into the two categories that the government is determined to protect: a home owner and a mortgage payer.

Unless there is a crash in the very near future then every year you will save money on your mortgage versus your rent and every year your house will increase in value.

If the crash doesn't happen for at least ten years, if at all, then you win.

 

That to my mind is the way that is and you really should buy if you possibly can.

I don't like that it is this way, I really don't like that is this way, but the world is as it is rather than as we would wish it to be.

 

The above presupposes that if you aren't buying a house then you are holding the majority of your savings in cash deposits; and for 95% of people that is the case.

 

If however you're in an asset class that is outstripping house prices by an amount greater than or equal to your rent costs less mortgage less return on your likely deposit then sitting on your hands would be the better strategy.

It's an impossible situation for millions of people Frank.Given the prices are at all time high multiples of earnings and with ultra low mortgage rates that means that prices are beyond any extreme most people thought possible so there is the chance of a huge collapse in prices that many people will never recover from.

People seem to forget that low prices + high interest rates = high prices + low interest rates.

Any movement in any of those variables when at the extremes can cause a bubble to collapse.

The Tory government will do nothing with IRs until they are forced to that is pretty clear.  "looking though" 5% inflation with savings rates at 0.1% is outright theft and they do not care.  However, how long are investors going to sit back and accept 0.1% bonds when inflation is 10% ?  Their hand could be forced.

Bubbles never end well, but they always end, buying into it now just because of desperation is maybe not the best approach, take a step back and try and make a sensible choice. The number of properties available for sale is at an all time low ( because of prices, demand, desperation ...not sure which ) but it would be prudent to wait until available listings go back up again.

Given the above chart at some point it should be clear to anyone that either nominally or in real terms ( or a bit of both ) prices are going to collapse, that is a given, who knows how and when.  

Anyone thinking of buying needs to ask themselves, which do they think more likely, if they think nominal falls are more likely then hold off.  If they think real term falls are more likely due to a surge in wages then buy now, fill your boots, get a massive mortgage, if it's a bit of both then buy something sensible and take advantage of any future  falls.

Cards on the table, my wife and I will look to buy in the new year now.  We held off to see what the BoE would do which as we expected was the square root of fuck all.  We also didnt want to gewt caught up in the mania. The market round us has died a death, the prices are high but nothing is selling now.  So we will wait to find something that we think is value and buy 50% cash, 50% mortgage.  We then will invest the rest of our cash pile into stuff people need, because ultimately, I can live without an iphone but I do need food.

Never forget the 2020/2021 dog prices, people were panic buying dogs for fuck sake that you can pick up for a fraction of the price now, houses are not the same as dogs but when prices are extremes collapse in price is inevitable.

 

 

[HousePriceMania]

51 minutes ago, Frank Hovis said:

The above presupposes that if you aren't buying a house then you are holding the majority of your savings in cash deposits; and for 95% of people that is the case.

 

If however you're in an asset class that is outstripping house prices by an amount greater than or equal to your rent costs less mortgage less return on your likely deposit then sitting on your hands would be the better strategy.

I think you hit the nail on the head there Frank.  

The 95% case though, they have little to lose.

The 5% case though, have much to lose, there is risk in both, at the end of the day, we mostly all need shelter.

[HousePriceMania]

From TOS:

1) "Some more tales of good news.

https://www.telegraph.co.uk/personal-banking/mortgages/older-borrowers-hardest-hit-mortgage-cost-increases/?utm_content=telegraph&utm_medium=Social&utm_campaign=Echobox&utm_source=Twitter#Echobox=1636442451

Older borrowers hardest hit by mortgage cost increases

Those with large equity stakes now paying highest rates in eight years"

 

2) "https://www.independent.co.uk/money/average-fixed-mortgage-rates-creeping-up-b1953520.html

Average fixed mortgage rates creeping up

The typical two- and five-year fixed rates on the market have increased month on month for the first time since June 2021, according to Moneyfacts."

 

3) "https://www.theweek.co.uk/business/954717/interest-rates-why-the-long-era-of-ever-cheaper-finance-is-finally-over

Interest rates: why the long era of ever-cheaper finance is finally over

Bank of England is warning that hikes are ahead as inflation soars"

 

[Frank Hovis]

3 minutes ago, HousePriceMania said:

Cards on the table, my wife and I will look to buy in the new year now.  We held off to see what the BoE would do which as we expected was the square root of fuck all.  The market round us has died a death, the prices are high but nothing is selling now.  So we will wait to find something that we think is value and buy 50% cash, 50% mortgage.  We then will invest the rest of our cash pile into stuff people need, because ultimately, I can live without an iphone but I do need food.

 

I agree with pretty much all of your post and think that a sensible strategy.

It's partly that I'm jaded about a crash from expecting one every year from 1998 on and including now but with less belief that it is going to happen with each passing year.

Successive governments have taken direct action to prop up the housing market whilst allowing sterling to steadily devalue.

I agree that ultimately it might be out of their hands but what if that is then accompanied by a sterling devaluation to write down government debt?

Again those holding cash lose as they see the nominal value of everything, including houses, shoot up 20%.

It's a theme I keep pushing but I think it very true that the absolute worst way to save for a house / house deposit is in cash because that is always losing value; and the more cash you have the more value you lose each year.

I look at my £50k of premium bonds and rather than going "Woo hoo £50k" think that's a stupid holding that will lose £2k of value next year.

[Axeman123]

17 minutes ago, HousePriceMania said:

https://www.telegraph.co.uk/personal-banking/mortgages/older-borrowers-hardest-hit-mortgage-cost-increases/?utm_content=telegraph&utm_medium=Social&utm_campaign=Echobox&utm_source=Twitter#Echobox=1636442451

Older borrowers hardest hit by mortgage cost increases

Those with large equity stakes now paying highest rates in eight years

I find that very interesting, surely the safest borrowers would pay the lowest rate.

Cynical me thinks they are concentrating the pain on the deepest pockets, knowing they are the least likely to jingle mail.

[HousePriceMania]

14 minutes ago, Frank Hovis said:

 

I look at my £50k of premium bonds and rather than going "Woo hoo £50k" think that's a stupid holding that will lose £2k of value next year.

Better 2K in value of 50K for 5 years than 60% off a £500K house you bought with the 50K deposit.

Pick how you want to lose your money right now.

[HousePriceMania]

18 hours ago, mh9000 said:

Probably not, but can you see it ever improving? I’m rapidly losing hope. I’m seeing people scrambling to get somewhere half decent at stupid prices.

It's like that's what they want you to do....buy anything at any price just because IRs are 0.1%...buy when you step back and look at it then that's maybe the worse thing you could possibly do right now.

1) Term Funding ended

2) Stamp Duty hand out ended

3) Scotland has pulled the plug on support schemes

4) Mortgage rates at all time low but rising

5) No supply

6) Pandemic over, people returning to offices

7) Furlough has ended and still to filter though

8) Inflation hitting peoples disposable

There are a lot of head winds what should at least held readjust the market back towards 2019 prices next year.  An agent told me repos were coming so maybe see if you can pick one of them up.  The one I saw was sold for over the asking price and the asking price was 20% over the 2019 sale price....this is how stupid people can be right now.

 

Some bint tried to convince my wife to buy one of these for £3K, because she had...

https://www.pets4homes.co.uk/classifieds/r-nvzmue9-cockapoos-puppies-bishop-auckland/

2 minutes ago, Axeman123 said:

I find that very interesting, surely the safest borrowers would pay the lowest rate.

Cynical me thinks they are concentrating the pain on the deepest pockets, knowing they are the least likely to jingle mail.

I thought that myself.  The 60% LTV brigage have been encourage to take on  massive risks to get < 1% rates.

 

[Option5]

15 minutes ago, Axeman123 said:

I find that very interesting, surely the safest borrowers would pay the lowest rate.

Cynical me thinks they are concentrating the pain on the deepest pockets, knowing they are the least likely to jingle mail.

Mostly older, maybe risk of them running out of money to pay off the mortgage due to inflation. Or maybe too old to get a mortgage with anyone else so stuck with whatever rate their lender sets.

[Frank Hovis]

12 minutes ago, HousePriceMania said:

Better 2K in value of 50K for 5 years than 60% off a £500K house you bought with the 50K deposit.

Pick how you want to lose your money right now.

 

I bought my house outright seven years ago so its value is moot.

Usually I would pump it into the stock markets but they've been flying recently (boosted by the £ falling as most of it is overseas) so I will be putting £20k into a S&S ISA to take up my tax free allowance though leaving it as cash for now; half of that will come from my current account so I'll drop that £50k to £40k and my annual loss to inflation from £2k to £1.6k.

[Green Devil]

4 hours ago, HousePriceMania said:

It's an impossible situation for millions of people Frank.Given the prices are at all time high multiples of earnings and with ultra low mortgage rates that means that prices are beyond any extreme most people thought possible so there is the chance of a huge collapse in prices that many people will never recover from.

People seem to forget that low prices + high interest rates = high prices + low interest rates.

Any movement in any of those variables when at the extremes can cause a bubble to collapse.

The Tory government will do nothing with IRs until they are forced to that is pretty clear.  "looking though" 5% inflation with savings rates at 0.1% is outright theft and they do not care.  However, how long are investors going to sit back and accept 0.1% bonds when inflation is 10% ?  Their hand could be forced.

Bubbles never end well, but they always end, buying into it now just because of desperation is maybe not the best approach, take a step back and try and make a sensible choice. The number of properties available for sale is at an all time low ( because of prices, demand, desperation ...not sure which ) but it would be prudent to wait until available listings go back up again.

Given the above chart at some point it should be clear to anyone that either nominally or in real terms ( or a bit of both ) prices are going to collapse, that is a given, who knows how and when.  

Anyone thinking of buying needs to ask themselves, which do they think more likely, if they think nominal falls are more likely then hold off.  If they think real term falls are more likely due to a surge in wages then buy now, fill your boots, get a massive mortgage, if it's a bit of both then buy something sensible and take advantage of any future  falls.

Cards on the table, my wife and I will look to buy in the new year now.  We held off to see what the BoE would do which as we expected was the square root of fuck all.  We also didnt want to gewt caught up in the mania. The market round us has died a death, the prices are high but nothing is selling now.  So we will wait to find something that we think is value and buy 50% cash, 50% mortgage.  We then will invest the rest of our cash pile into stuff people need, because ultimately, I can live without an iphone but I do need food.

Never forget the 2020/2021 dog prices, people were panic buying dogs for fuck sake that you can pick up for a fraction of the price now, houses are not the same as dogs but when prices are extremes collapse in price is inevitable.

 

 

What choice do they have? None. Govbankment always have geld the royal flush. At best youre on a pair of fours 😂😂

 

[HousePriceMania]

2 hours ago, Green Devil said:

What choice do they have?

Become a tax dodging fraudster, like them, donate to the tory party, become an MP and get a peerage.

Happy days.

[spygirl]

11 hours ago, HousePriceMania said:

From TOS:

1) "Some more tales of good news.

https://www.telegraph.co.uk/personal-banking/mortgages/older-borrowers-hardest-hit-mortgage-cost-increases/?utm_content=telegraph&utm_medium=Social&utm_campaign=Echobox&utm_source=Twitter#Echobox=1636442451

Older borrowers hardest hit by mortgage cost increases

Those with large equity stakes now paying highest rates in eight years"

 

2) "https://www.independent.co.uk/money/average-fixed-mortgage-rates-creeping-up-b1953520.html

Average fixed mortgage rates creeping up

The typical two- and five-year fixed rates on the market have increased month on month for the first time since June 2021, according to Moneyfacts."

 

3) "https://www.theweek.co.uk/business/954717/interest-rates-why-the-long-era-of-ever-cheaper-finance-is-finally-over

Interest rates: why the long era of ever-cheaper finance is finally over

Bank of England is warning that hikes are ahead as inflation soars"

 

Rob dog x 2 !!