DOOM: House prices

[jamesbrown]

So, the ones who switch mortgages every couple of years will have to stick with where they are, or hope that they have paid some of it off.

Or deal with a forced sale because they can't afford any of their new mortgage options. I pity the poor buggers on Help To Buy or in shared ownership accommodation who will get hammered from multiple angles.

Either way, a crash is looking likely. Brits are great at housing booms and busts.

[PCTNN]

Or deal with a forced sale because they can't afford any of their new mortgage options. I pity the poor buggers on Help To Buy or in shared ownership accommodation who will get hammered from multiple angles.

I don't pity them at all. Serves them right for wanting to live beyond their means. Again goes back to what I said many times before about people thinking they are better than they actually are...

[Protagoras]

Or deal with a forced sale because they can't afford any of their new mortgage options. I pity the poor buggers on Help To Buy or in shared ownership accommodation who will get hammered from multiple angles.

Either way, a crash is looking likely. Brits are great at housing booms and busts.

I am out of touch with the process of getting a mortgage, but I would have thought that when taking a mortgage at a stupidly low interest rate, people would have considered the scenario that rates could triple. Or did some people actually believe that there was a new world of forever low interest rates?

[jamesbrown]

I am out of touch with the process of getting a mortgage, but I would have thought that when taking a mortgage at a stupidly low interest rate, people would have considered the scenario that rates could triple. Or did some people actually believe that there was a new world of forever low interest rates?

I expect the decision process for most people went something like "I want a house, how can I get one?". They would've got whatever the bank allowed them via stress testing, which does include an interest rate multiple, yes, but the actual multiple is now some way above that, so it will no longer be affordable for some of them (especially those who bought in the last few years and have barely started to pay it off and those in HTB or shared ownership where there is an additional rent/loan component that is also getting more expensive).

[vetran]

I am out of touch with the process of getting a mortgage, but I would have thought that when taking a mortgage at a stupidly low interest rate, people would have considered the scenario that rates could triple. Or did some people actually believe that there was a new world of forever low interest rates?

I luckily did and fixed for 5 years every time, but that was after I went through the ERM fiasco and resulting variable rates, I lived on toast for a while.

[d000hg]

So, the ones who switch mortgages every couple of years will have to stick with where they are.

Which is most people with mortgages, because not switching is idiotic and 2/3 year discount products are the most common.
And their payments rise drastically as a result.

So I would say that this hurts your assertion that house prices aren't relevant to real life. Falling prices can have a real, detrimental effect on a huge number of people.

[WTFH]

Which is most people with mortgages, because not switching is idiotic and 2/3 year discount products are the most common.
And their payments rise drastically as a result.

So I would say that this hurts your assertion that house prices aren't relevant to real life. Falling prices can have a real, detrimental effect on a huge number of people.

If they had offset mortgages, or better yet, saw the "discount" period as a time to save, rather than thinking that discount = normal, it wouldn't be a problem.
My last mortgage had a 2 year discount and was an offset, so for the first 2 years I pumped most of the "saving" into the offset account. That meant by the end the discount had saved me even more.

The problem will be bigger for those with interest only mortgages, where they are not reducing the capital at all. But that's part of society and even how the government works - borrow now, repay never.

[hugebrain]

Don’t be such a Debbie Downer. The only thing to survive from the mini-budget was the stamp duty change designed to pop another 100k onto house prices, and now we have a new chancellor who is balls deep into BTL.

Let the good times roll.

[jamesbrown]

Don’t be such a Debbie Downer. The only thing to survive from the mini-budget was the stamp duty change designed to pop another 100k onto house prices, and now we have a new chancellor who is balls deep into BTL.

Let the good times roll.

If by good times, you mean watching minibrain lose his shirt on bedsits in Swindon, then let the good times roll!

[SueEllen]

I don't pity them at all. Serves them right for wanting to live beyond their means. Again goes back to what I said many times before about people thinking they are better than they actually are...

So you think people who fall for a living arrangement pushed by the government deserved to be punished.

You know state pensions are pushed by the government?