House Prices #3 Property market, buying and selling

[Yel]

They really should have made it clear when people were taking out mortgages that rates of 2% and less are historically very low and that they're likely to go back to the long term average of 6-7%.

The increases in mortgage payments this year are the kind of thing renters have been putting up with for years. But no one was called to save renters from this.

If someone has over stretched themselves is it really the job of the government to help them out? They can't protect someone's assets. It's not the end of the world if people have to sell and rent, many of us have no choice but to rent.

----

bbc news:

Calls for chancellor to address homeowners
Chancellor Jeremy Hunt is facing calls to go to the House of Commons and address mortgage-holders on how he plans to help them, if the Bank of England increases interest rates as expected later on today.

Liberal Democrat Treasury spokeswoman Sarah Olney said: "The chancellor must address the country immediately after the rate rise decision to spell out a plan to save homeowners on the brink.

"He should either come to Parliament or hold a press conference to announce support for families facing mortgage bill rises worth hundreds of pounds a month.

 

[Folkevermore]

They really should have made it clear when people were taking out mortgages that rates of 2% and less are historically very low and that they're likely to go back to the long term average of 6-7%.

The increases in mortgage payments this year are the kind of thing renters have been putting up with for years. But no one was called to save renters from this.

If someone has over stretched themselves is it really the job of the government to help them out? They can't protect someone's assets. It's not the end of the world if people have to sell and rent, many of us have no choice but to rent.

----

bbc news:

Calls for chancellor to address homeowners
Chancellor Jeremy Hunt is facing calls to go to the House of Commons and address mortgage-holders on how he plans to help them, if the Bank of England increases interest rates as expected later on today.

Liberal Democrat Treasury spokeswoman Sarah Olney said: "The chancellor must address the country immediately after the rate rise decision to spell out a plan to save homeowners on the brink.

"He should either come to Parliament or hold a press conference to announce support for families facing mortgage bill rises worth hundreds of pounds a month.

I think the real failure was banks continuously putting up the salary multiplier amount. It pushed up prices and meant people had to over leverage themselves to compete.

the problem isn’t so much having to sell their home and rent, I guess some of these people are risking £50-100k of negative equity that they will still owe the bank.

There also is a shortage of rental properties

 

[epl000]

If someone has over stretched themselves is it really the job of the government to help them out? They can't protect someone's assets. It's not the end of the world if people have to sell and rent, many of us have no choice but to rent.

No, I don't think it is the job of the government at all. However, if they don't do so, I think they may be concerned that there will be an increase in repossessions which ultimately may impact property prices. Whilst I think that is a good thing and should happen, the Tory voters will not be pleased with that.

 

[Yel]

That's where regulation should have kicked in to stop banks from pushing ever more debt.

If they sell now very few will be in any negative equity, you'd have to buy at the very top. But lots are entitled and even though they bought their house for 160k they think they've lost money if they ever sell it for a penny less than the 320k it was worth at the peak

 

[Bobbleowl90]

If the rate goes up again today, how likely is it that mortgages will rise above 6.5%?

Why mortgages could get cheaper even though interest rates are rising

We may have already seen the peak in quoted mortgage rates, experts say

www.telegraph.co.uk

This article seems to think it’ll effect those on a tracker mainly.

 

[Yel]

they may be concerned that there will be an increase in repossessions which ultimately may impact property prices. Whilst I think that is a good thing and should happen, the Tory voters will not be pleased with that.

Agree but failure is part of capitalism. They should help people to extend their mortgages and have short term switches to interest only to, but that should be the most.

Quite a lot of Tory voters are saying house prices should fall and they're unsustainable going by the daily mail most liked comments. A 20% fall long term wouldn't negatively affect many people at all - as most have had many years of low rates paying off the debt where it kept rising. Even those that bought recently wouldn't be that negatively affected vs the costs of if they had to rent.

 

[Folkevermore]

If the rate goes up again today, how likely is it that mortgages will rise above 6.5%?

Why mortgages could get cheaper even though interest rates are rising

We may have already seen the peak in quoted mortgage rates, experts say

www.telegraph.co.uk

This article seems to think it’ll effect those on a tracker mainly.

Fixed rates won’t change much, they’re based on SONIA swap rates and they have a ton of economics making predictions on the next few years when they determine those

 

[Yel]

The rise today will only affect trackers as the fixed rates already have this rise priced in.

 

[Bobbleowl90]

Trying to think positive and we have a substantial amount saved for a deposit. Totally priced out at the moment, but we can stretch to an expensive monthly payment (within reason) and hope prices drop. Would rather be in this position as shit as it is without a house, than bought a house 2 years ago on a 2 year fix and not being able to afford the massive increase in payments.

 

[Folkevermore]

Trying to think positive and we have a substantial amount saved for a deposit. Totally priced out at the moment, but we can stretch to an expensive monthly payment (within reason) and hope prices drop. Would rather be in this position as shit as it is without a house, than bought a house 2 years ago on a 2 year fix and not being able to afford the massive increase in payments.

I have a deposit saved, but got to wait until January due to starting a new job. I’m hoping the downfall in the market combined with my salary increase means that I’ll be able to buy something that isn’t totally awful

 

[Hevs75]

I'm glad I came across this thread I'm normally lurking on the celeb gossip page!, I was talking about mortgages with my friend last weekend and I didn't realise that she has an interest only mortgage (no endowment), she is starting to fret about the mortgage and wants to change it from an interest only one to a better one for her but if I'm honest she seems to be a bit scared of doing this, I think she has this idea that she won't be able to change it and be stuck with it. Her mortgage is £45K and in her name only though she is married, she said her credit rating is very good but her husbands isn't, she earns around £28K per annum. I don't really know a great deal about mortgages so advised her to get in touch with an independent financial advisor or mortgage advisor but having come across this forum I was just wondering if anyone else had been in this situation ? Just to add my friend and her husband are late 40's.

 

[judgejohndeed]

That's where regulation should have kicked in to stop banks from pushing ever more debt.

If they sell now very few will be in any negative equity, you'd have to buy at the very top. But lots are entitled and even though they bought their house for 160k they think they've lost money if they ever sell it for a penny less than the 320k it was worth at the peak

I think some forget that the price they paid is available on Zoopla usually as well. We offered on a property recently that was really inflated even for the area and they rejected us/didn’t even want to negotiate. The property had been on the market for almost a year. Since we offered/were accepted on somewhere else, that same property is still on the market, but they’ve reduced the price by far more than the reduction they would’ve taken if they accepted our below asking offer, because prices in the area have all fallen so much in the last month. Can’t pretend I wasn’t absolutely gleeful about it tbh, because Zoopla tells me they bought the property 10 years ago and they’re trying to get over 100k profit on it

 

[jaymie]

I think some forget that the price they paid is available on Zoopla usually as well. We offered on a property recently that was really inflated even for the area and they rejected us/didn’t even want to negotiate. The property had been on the market for almost a year. Since we offered/were accepted on somewhere else, that same property is still on the market, but they’ve reduced the price by far more than the reduction they would’ve taken if they accepted our below asking offer, because prices in the area have all fallen so much in the last month. Can’t pretend I wasn’t absolutely gleeful about it tbh, because Zoopla tells me they bought the property 10 years ago and they’re trying to get over 100k profit on it

Serve them right. Is harder for them to move now. I bet they must be gutted

 

[Yel]

I think some forget that the price they paid is available on Zoopla usually as well.

"We're not going to give it away!"

Said the vendors outraged after receiving an offer 2k less than asking price on a property that's risen 180k since they bought it.

 

[Notworthy]

Trying to think positive and we have a substantial amount saved for a deposit. Totally priced out at the moment, but we can stretch to an expensive monthly payment (within reason) and hope prices drop. Would rather be in this position as shit as it is without a house, than bought a house 2 years ago on a 2 year fix and not being able to afford the massive increase in payments.

Let this be a lesson to you, Make sure that you factor in atleast 20% to 30% rise in mortgage payments. Personally when I first took out my mortgage, I saw how little the principle was reducing, called the bank and reduced my term by 3 years, it only cost an extra £50 and I figured worse case scenario I've got 3 years I can add back on if I need to reduce my payments at a later date.
Also yes there are economists looking a few years ahead but it's not an exact science as we have seen with Covid and Ukraine. World events can happen overnight that will impact us.

 

[Folkevermore]

Let this be a lesson to you, Make sure that you factor in atleast 20% to 30% rise in mortgage payments. Personally when I first took out my mortgage, I saw how little the principle was reducing, called the bank and reduced my term by 3 years, it only cost an extra £50 and I figured worse case scenario I've got 3 years I can add back on if I need to reduce my payments at a later date.
Also yes there are economists looking a few years ahead but it's not an exact science as we have seen with Covid and Ukraine. World events can happen overnight that will impact us.

I guess the problem is, a lot of people can barely afford to get on the ladder and have no choice but to overstretch themselves

 

[Yel]

A lot of people are told do whatever you can to buy anything and then long term you'll do well with the property turning into a money printing machine.

Yes that might have been true for previous decades, but that's not always going to be the case.

In other countries it's more common for people to sign up for a mortgage with a long fix, sometimes for the full term. Many people are totally unaware and assumed they'd keep being able to get 2% rates for the full term, despite only signing up for short fixes.

I've a funny feeling they'll only raise them 0.5%. Being slow to react and slow to raise does more damage in the long term.

 

[Clover123]

I think some forget that the price they paid is available on Zoopla usually as well. We offered on a property recently that was really inflated even for the area and they rejected us/didn’t even want to negotiate. The property had been on the market for almost a year. Since we offered/were accepted on somewhere else, that same property is still on the market, but they’ve reduced the price by far more than the reduction they would’ve taken if they accepted our below asking offer, because prices in the area have all fallen so much in the last month. Can’t pretend I wasn’t absolutely gleeful about it tbh, because Zoopla tells me they bought the property 10 years ago and they’re trying to get over 100k profit on it

This is so true! Loads of houses on the market this year in my area have the price paid in 2020 available on Zoopla. I saw a huge amount of terraced houses in a crappy area that sold for £150k in 2020 on the market for £250k+ . I couldn't believe the cheek of someone having made zero to no changes asking for £100k more so quickly!!! I hope most of them didn't actually get the price they had it up for because it was an absolute joke! There's such a delay with land registry at the mo but I'm definitely going to check in.

 

[Yel]

They have actually gone for 0.75% (thankfully). Would have created more issues if they'd carried on lowering it way less than the fed.

 

[Bubblebee94]

I think it’s unfair and crazy to be laugh at peoples downfall because some people had no choice but to take on a lot of debt just to get something suitable. Whether that be a 2 bed terrace house in a not so great area or a 3 bed because they already have kids. People fail to realise that if people can shoulder the rise they will, they’ll just cut back on non essentials which will impact those typically in lower paying job. The only people that will sell will be the ones who can’t afford the new mortgage. It also doesn’t change the fact that supply is still an issue in the UK.

Also even if prices drop banks will tighten up their lending criteria making it harder for FTB to buy a place anyway. FTB will still be paying crazy prices, it just means most of the mortgage payments will be interest.