Reply to: "Mortgage ‘catastrophe’ will lose us the election, warn Tory MPs"

[d000hg]

Yeah, *that's* what will lose them the election... if it wasn't for mortgage rates they would coast through
Might as well accept they're going down and just implement anything unpopular but worthwhile while they still can.

[Smoggy]

The difference isn't that huge. You can get a 2 year fixed savings rate of about 5.5% Vs 6% for a mortgage. That difference (plus one off fees) needs to cover admin costs, the expected cost of mortgage default and the bank's profits.

https://www.moneysavingexpert.com/sa.../#twoyearfixed

[AtW]

Banks got yuge margin between saver rates and what they charge

[SueEllen]

I wonder what this https://www.bbc.co.uk/news/uk-politics-65952298 is trying to bury?

[Fraidycat]

Listening to the radio, seem lots of people have got interest only mortgages.

People with 150K mortgages seeing payments increase from 250 to 800.
People with 450K mortgages seeing payments increase from 750 to 2400. (+£20,000 per year )
People with 750K mortgages seeing payments increase from 1250 to 4000 (+£33,000 per year )

[Fraidycat]

Yeah lots of new builds have gone up. But not enough to cover the 10 million increase in population since 2000.

[dsc]

That's really not true. Every town around me has new builds. I don't mean sneaking a couple of houses on some little plot. Full estates on the edge of the towns.

Is it enough? Probably not, but it's certainly happening around my neck of the woods.

Uncontrolled migrations + cheap money is what had as much if not more impact than house building numbers.

How many houses per full estate would that be then? and are they close to a big motorway / train track or some other tulip thing which makes them less then ideal to live in?

High quality blocks of flats (we are talking modern not the tulipe you see in the UK) would solve the issue better as you get more dwellings per sqm, but 1) there's very little of those 2) and for some odd reason the quality of everything I've seen in the UK is light years behind the rest of Europe.

And how exactly is cheap money negatively impacting building? it should work the other way, if it's cheap to borrow you can build more as investment is easy.

[JustKeepSwimming]

Well BoE can only change interest rates, so they are doing that, but apparently to some this is proof that:

"the Bank of England and Britain’s politicians have failed repeatedly to get a handle on inflation."

One solution would be to build more bloody houses / flats / whatever. Apart from London there's absolutely no investment in property in this country, nothing new is being built.

That's really not true. Every town around me has new builds. I don't mean sneaking a couple of houses on some little plot. Full estates on the edge of the towns.

Is it enough? Probably not, but it's certainly happening around my neck of the woods.

Uncontrolled migrations + cheap money is what had as much if not more impact than house building numbers.

[dsc]

Well BoE can only change interest rates, so they are doing that, but apparently to some this is proof that:

"the Bank of England and Britain’s politicians have failed repeatedly to get a handle on inflation."

One solution would be to build more bloody houses / flats / whatever. Apart from London there's absolutely no investment in property in this country, nothing new is being built.

[TheDude]

Is it even possible to get self certified mortgages these days, i thought they were no longer a thing?

Financial alchemy is what we do in Essex.

[Fraidycat]

I wonder how this will affect my part of Essex where there is no correlation between declared income, this size of ones mortgage

Is it even possible to get self certified mortgages these days, i thought they were no longer a thing?

[TheDude]

I wonder how this will affect my part of Essex where there is no correlation between declared income, this size of ones mortgage or the cars one drives.

[Fraidycat]

Got my first mortgage in the 80's and for much of its life paid rates around 14%

But what was your actual monthly mortgage payment?, if it was say £500 in 1985, that would only be around £1500 in todays money. House prices were lower back then so 14% wasn't as scary as it would be now.

[tazdevil]

Got my first mortgage in the 80's and for much of its life paid rates around 14% Money isn't free and a lot of people are now discovering this. Thankfully increased rates give savers something to work with and the taming of the house price bubble will ultimately be a good thing.

[SueEllen]

https://www.telegraph.co.uk/property...ecord-britain/

Why Britain’s mortgage crisis risks triggering the biggest house price crash on record
Years of cheap money put homeowners on course for a brutal reckoning

By
Alexa Phillips
19 June 2023 • 6:00am


Nikki Kopelman and her husband James Bore bought their £420,000 home in 2019, securing a five-year fixed mortgage at a bargain rate of 2.5pc.

But the era of cheap money is now coming to a brutal end for Britain’s homeowners. Kopelman – and millions of other borrowers – are facing rate rises that to many will be simply unaffordable.

As a result, the housing market is in for a terrible reckoning – with some forecasters predicting that the impending mortgage catastrophe could trigger a crash the likes of which have not been seen since records began. Last month, Britain’s biggest bank Lloyds said prices could fall by as much as 35pc in the worst-case scenario.

And now that the dust is settling on a grim picture for the housing market, economists say that this should all have been foreseeable – and even avoidable.

More than a decade of unprecedented ultra-low interest rates was always going to come to an abrupt end.

And then there were the ill-advised policy interventions. Critics say a stamp duty holiday in the pandemic poured fuel onto an already red-hot housing market. The Conservative Government’s heavy tax burden is furthermore adding insult to injury for already strained middle-class households.

And while this crisis has been simmering, the Bank of England and Britain’s politicians have failed repeatedly to get a handle on inflation.