A quarter of home owners live on 'financial precipice'

MissMoneypenny

Really2 wrote: »

Do you think they will not move as soon as rates start to rise seeing they are unlikely to have any redemption penalty.

Many are stuck on SVRs because they can't get another deal due to a job loss, salary cut, negative equity or are a product of the lie to buy culture.

Really2

MissMoneypenny wrote: »

Many are stuck on SVRs because they can't get another deal due to a job loss, salary cut, negative equity or are a product of the lie to buy culture.

I would say most on SVR or trackers because they are over half the interest rate of a 2 year fixed. (and still after over a year no sign of any pending future movement)

Some will be because of what you said above but in reality we all know it would be a minority.

I switched to a tracker in Oct 2008, I am sure many other also decided that was a good time also.

carolt

I found this bit interesting if unsurprising:

"one in eight :eek: adults in this age range has deliberately over-inflated their income to secure a larger loan"

silvercar

A quarter of home owners live on 'financial precipice'

What percentage of home owners don't have mortgages? How many of them struggle to survive on pensions/ benefits just to afford necessities like utilities, food and council tax?

This "quarter" are not just people struggling to afford their mortgage.

Also what percentage of non- homeowners are on the precipice? Given that benfits are only meant to enable you to survive, I would guess that a lot of non- home owners are in the same catagory.

carolt

I'm sure they are - but they are irrelevant to house prices, as not going to buy anyway - whereas lots of mortgaged home-owners who fall over that precipice = lots of cheap homes for sale by desperate buyers.

Which does concern this board.

Really2

carolt wrote: »

I'm sure they are - but they are irrelevant to house prices, as not going to buy anyway - whereas lots of mortgaged home-owners who fall over that precipice = lots of cheap homes for sale by desperate buyers.

Which does concern this board.

But it is if the average wage falls by nearly 20% and then it is only base on borrowers aged between 35 and 44.

Like I said I think if the average wage fell by that amount in the last 50 years the result would be the same.

carolt

Really2 wrote: »

But it is if the average wage falls by nearly 20% and then it is only base on borrowers aged between 35 and 44.

Like I said I think if the average wage fell by that amount in the last 50 years the result would be the same.

I can't see any reference in the article to average salaries needing to fall by 20% - I'm not sure what you base that on.

Average salaries don't need to fall at all - individuals need to have experiences be they having another baby and losing 1 or part of 1 income - not unusual at this age - suffer divorce, breavement or ill-health - possible at any age, lose overtime, have their salaries reduced, hours cut, or their expenses increase eg through higher taxes (generally expected), removal of/reduction in tax credits (ditto), or higher costs eg petrol.

And we're not talking 'average' salaries are we - I'd expect people of that age group to be on higher than average salaries anyway.

Don't forget, if half have them inflated their income to get a mortgage in the first place, they're on a very slippery slope.

Pete111

carolt wrote: »

I can't see any reference in the article to average salaries needing to fall by 20% - I'm not sure what you base that on.

Average salaries don't need to fall at all - individuals need to have experiences be they having another baby and losing 1 or part of 1 income - not unusual at this age - suffer divorce, breavement or ill-health - possible at any age, lose overtime, have their salaries reduced, hours cut, or their expenses increase eg through higher taxes (generally expected), removal of/reduction in tax credits (ditto), or higher costs eg petrol.

And we're not talking 'average' salaries are we - I'd expect people of that age group to be on higher than average salaries anyway.

Don't forget, if half have them inflated their income to get a mortgage in the first place, they're on a very slippery slope.

Ummm when did '1 in 8' become 'half'?

carolt

Pete111 wrote: »

Ummm when did '1 in 8' become 'half'?

1 in 8 of the population is 12.5%. Which is about half of the 26% of mortgage holders of that age who are struggling.

silvercar

carolt wrote: »

1 in 8 of the population is 12.5%. Which is about half of the 26% of mortgage holders of that age who are struggling.

But you are implying that all those that are on the precipe are mortgage holders and all the people on the precipe are the ones that inflated their income.

I don't think either is true. People inflate their income because they feel they can afford the higher mortgage amount, either because lenders don't take into account non standard income or because they have a lifestyle more frugal than lender's imagine. Ok there are some who inflate their income because they are greedy and stupid. (BTW I'm not saying it is right to inflate income, just explaining why people do it.)