House Prices #4 Property market, buying and selling

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Yel

Yel

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Nationwide index out this morning, house prices down 3.4% YoY
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Biggest house price falls in 14 years
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www.bbc.com

House prices fall at fastest pace in nearly 14 years, says Nationwide

Nationwide says prices in the year to May fell 3.4% and higher mortgage rates could last longer.
www.bbc.com

Guardian:
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I'd see this as good news. In other countries where house prices are not so out of sync with wages it's the norm to sign up for a long mortgage.

It makes sense as the prices depend on how expensive it is to borrow money. So many have taken out huge debt based on the old days of near 0 interest rates.

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Record demand for 35-YEAR mortgages as rates keep rising: Proportion of first-time buyers taking out lengthy loans doubles in just two years amid fears of debt timebomb
  • Spreading out loans makes them more affordable for buyers in the short term
  • But homeowners will accrue thousands of pounds more debt on the interest - https://www.12ft.io/https://www.dai...ing-lengthy-loans-doubles-just-two-years.html
 
Yel said:
I'd see this as good news. In other countries where house prices are not so out of sync with wages it's the norm to sign up for a long mortgage.

It makes sense as the prices depend on how expensive it is to borrow money. So many have taken out huge debt based on the old days of near 0 interest rates.

--

Record demand for 35-YEAR mortgages as rates keep rising: Proportion of first-time buyers taking out lengthy loans doubles in just two years amid fears of debt timebomb
  • Spreading out loans makes them more affordable for buyers in the short term
  • But homeowners will accrue thousands of pounds more debt on the interest - https://www.12ft.io/https://www.dai...ing-lengthy-loans-doubles-just-two-years.html
Click to expand...
Considering you remortgage every 2/5 years, the initial term doesn’t really matter at all and people fixate on it way too much.

Mines 38 years and people always seem horrified when I tell them that. But interest rates may drop, mine and my partners salary may increase, and we can easily reduce the term to adjust for that or make overpayments if we want.

We’ve deliberately gone for a longer term that allows us to have a good amount of disposable income per month, as well as allowing us to put approx £500 a month in savings for an emergency fund. It’s just the sensible option.
 
D'yknow what I totally misunderstood that headline :LOL:

I thought it was people fixing for 35 years. People in other countries with sane housing markets fix for the entire term which I think is sensible. This jumping every 2-5 years is a very risky game.

As many of those who fixed 2 years ago for 0.5% are going to find out as their rate jumps to 5.5%
 
Yel said:
D'yknow what I totally misunderstood that headline :LOL:

I thought it was people fixing for 35 years. People in other countries with sane housing markets fix for the entire term which I think is sensible. This jumping every 2-5 years is a very risky game.

As many of those who fixed 2 years ago for 0.5% are going to find out as their rate jumps to 5.5%
Click to expand...
I’ve always thought it strange that these longer fixes aren’t available as readily in the U.K. as they are in other places. In the US I’m pretty sure people often fix for their whole mortgage term.
 
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They do in France also. It makes sense as when you buy it the price is very dependent on the rate.

Risky game taking something out for 40 years but only fixing for 2. But people like to take their chances aka gamble.
 
Yel said:
They do in France also. It makes sense as when you buy it the price is very dependent on the rate.

Risky game taking something out for 40 years but only fixing for 2. But people like to take their chances aka gamble.
Click to expand...
I guess the the issue with these longer terms is that they would have a much larger impact on house prices when the rate increases. If I had to fix for my whole term, I wouldn’t have bought when I did, and would’ve instead waited to see if rates dropped.
the government and banks will use any means to prop up the U.K. house market I guess.
 
halifax index now showing falls

www.bbc.com

House prices in first annual fall for 11 years, says the Halifax

The UK's biggest mortgage lender says rising borrowing costs are affecting confidence.
www.bbc.com
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Folkevermore said:
I guess the the issue with these longer terms is that they would have a much larger impact on house prices when the rate increases. If I had to fix for my whole term, I wouldn’t have bought when I did, and would’ve instead waited to see if rates dropped.
the government and banks will use any means to prop up the U.K. house market I guess.
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Agree, it can't suddenly switch from one system to the other. Should have been gently reformed over many years rather than leading us to where wer are today. But there's no interest in long term and sustainability.
 
Looks like these people bought a second home in East London on an interest only mortgage that has risen from 1% to 5%. From the sounds of it they've been letting it out on air b&b but are now trying to sell it.

They say they're waiting for rates to drop and calling the current rates mind boggling. The current rates are the return to the norm imo. They could be waiting years for rates to drop, and I doubt they're dropping back to the 1% they had before.

Not suprised they've not had any offers, could get a second bedroom for that price.

www.standard.co.uk

‘Our mortgage went from £400 a month to over £2,000 — we’re in hell’

Across the capital, prospective buyers and remortgaging homeowners are finding themselves slapped with mind-boggling lender rates and deals being withdrawn at the eleventh hour. Claire Cohen speaks to those in crisis
www.standard.co.uk www.standard.co.uk

www.rightmove.co.uk

Check out this 1 bedroom apartment for sale on Rightmove

1 bedroom apartment for sale in Wadeson Street, London, E2 for £450,000. Marketed by Purplebricks, covering East London
www.rightmove.co.uk www.rightmove.co.uk
 
Yel said:
Looks like these people bought a second home in East London on an interest only mortgage that has risen from 1% to 5%. From the sounds of it they've been letting it out on air b&b but are now trying to sell it.

They say they're waiting for rates to drop and calling the current rates mind boggling. The current rates are the return to the norm imo. They could be waiting years for rates to drop, and I doubt they're dropping back to the 1% they had before.

Not suprised they've not had any offers, could get a second bedroom for that price.

www.standard.co.uk

‘Our mortgage went from £400 a month to over £2,000 — we’re in hell’

Across the capital, prospective buyers and remortgaging homeowners are finding themselves slapped with mind-boggling lender rates and deals being withdrawn at the eleventh hour. Claire Cohen speaks to those in crisis
www.standard.co.uk www.standard.co.uk

www.rightmove.co.uk

Check out this 1 bedroom apartment for sale on Rightmove

1 bedroom apartment for sale in Wadeson Street, London, E2 for £450,000. Marketed by Purplebricks, covering East London
www.rightmove.co.uk www.rightmove.co.uk
Click to expand...
Shortly after I bought my first house, back in the 80’s, mortgage rates rose to nearly 15%. That is mind boggling!
 
This is the most up to date earnings to house price graph I can find, it ends q1 2022.

All the free printed money and stamp duty holiday pushed things to the highest ratio ever seen.

It's totally unlike 2008 where they could drop rates and do loads of things to keep things sailing along, just about the opposite.

Screenshot_20230611_134546_Chrome.jpg
 
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