Get ready for the storm

Procrastinator333

IveSeenTheLight wrote: »

I do accept, there are a number of people on trackers, however this will be a lowering number as products revert to SVR.

I myself have two SVR mortgages, simply because they are better than when worked out financially against getting a new product at this time.

Certainly myself and I assume many others, will choose fixed products when mortgage rate increase.

This for me is a very valid point.

Consumers are taking advantage of the SVR's for the current years and will likely fix (could be for 5 or 10 years), when rates start to rise.

This means that roughly 1/3 or 1/2 of the mortgage product is gauranteed to be at the lowest in recent history and goes a long way to ensuring security and that the amount paid out over the duration of the loan is kept to a minimum

On the 0% rates you mention, there is a vast difference between the BoE rate and mortgage rates.
Last I looked, you could get a 5 year fix for around 4.79%, not that much different as I recall to the peak of the housing market

I don't want to get in to a debate about what is in those aveages, there is no way of knowing.

I don't really think interest rates themselves and % mortgage costs are going to have much of an impact on house prices anyway. The boe clearly wants a bit of inflation and isn't going to raise rates.

The higher number of svrs does leave people open to some nasty shocks, but doubt it will matter due to above.

I disagree that people can sit on an svr andthen fix when rates rise. The banks will see rate rises coming long before joe bloggs and will price accordingly. But as above.

I just wanted to see the data. If the % of people paying over 50% had risen, fallen or stayed the same, that to me would be a new piece of data.

RDB

Linton wrote: »

I am saying that if you are looking at that property that is bought to live in as opposed to as an investment, the concept of under or over valued is meaningless - the current value almost by definition is the right one, being the one where the number of buyers equals the number of sellers.

I am also saying that FTB house prices will always be at the limit of what most potential FTBers can afford. The only reason for house prices to fall will be if a lot fewer people can afford to buy them because of the wider economic situation. So compared to now, houses could be cheaper, but it wont do the majority of people wanting to buy any good because what they can afford will also have fallen.

How does that apply to the 90's? I bought a lovely house for £40K and my brother a really really nice house for £60K. If you didnt mind a bit of renovating an average house was £20K.

Yes wages were less, but not that much less when compared with wages house prices today.

chucky

RDB wrote: »

How does that apply to the 90's? I remember you could get a lovely house for £40 and really really nice house for £60K. If you didnt mind a bit of renovating an average house for £20.

Yes wages were less, but not that much less when compared with wages house prices today.

How does that apply to the 80's? I remember you could get a lovely house for £20 and really really nice house for £40K. If you didnt mind a bit of renovating an average house for £10.

Yes wages were less, but not that much less when compared with wages house prices today.

StevieJ

chucky wrote: »

How does that apply to the 80's? I remember you could get a lovely house for £20 and really really nice house for £40K. If you didnt mind a bit of renovating an average house for £10.

Yes wages were less, but not that much less when compared with wages house prices today.

I was going to say the kids could buy one out of their pocket money

IveSeenTheLight

Procrastinator333 wrote: »

I don't really think interest rates themselves and % mortgage costs are going to have much of an impact on house prices anyway.

On the contrary, the low mortgage rates means better affordability.

Procrastinator333 wrote: »

The higher number of svrs does leave people open to some nasty shocks, but doubt it will matter due to above.

I disagree that people can sit on an svr andthen fix when rates rise. The banks will see rate rises coming long before joe bloggs and will price accordingly. But as above.

I think most people on SVR's have chosen to do so because they see that it is checper than going on to another product.

Many of these will be watching the mortgage rates and seeing when they start to move in an upward motion.

I know that I'm on an SVR and will continue to hapily do so until I need to reassess when the mortgage rates start to rise.

Procrastinator333

IveSeenTheLight wrote: »

On the contrary, the low mortgage rates means better affordability.



I think most people on SVR's have chosen to do so because they see that it is checper than going on to another product.

Many of these will be watching the mortgage rates and seeing when they start to move in an upward motion.

I know that I'm on an SVR and will continue to hapily do so until I need to reassess when the mortgage rates start to rise.

As the figures show, no real change in the % over last 12 months, so it being 31% this first quarter isn't going to change anything.

I don't see interest rate changes coming, so don't think they are going to have an impact.

Many on svrs have no choice, their ltv is too low. And those waiting to see what happens, will not have access to the same fixed rates as they do today if they wait for signals. I'm not saying they should fix, just that it is naive to think they can take the low rates then fix at today's offers when prices do go up.

IveSeenTheLight

Procrastinator333 wrote: »

As the figures show, no real change in the % over last 12 months, so it being 31% this first quarter isn't going to change anything.

I don't see interest rate changes coming, so don't think they are going to have an impact.

Many on svrs have no choice, their ltv is too low. And those waiting to see what happens, will not have access to the same fixed rates as they do today if they wait for signals. I'm not saying they should fix, just that it is naive to think they can take the low rates then fix at today's offers when prices do go up.

I don;t think mortgage rates will shoot up.
It certainly worth doing the research and knowing when the signals first start showing.
Sure you may not get the absolute, categoric low rate, but then this is the weighting factor against how much you gain by being on a low SVR.

Right now my rate is 1.6%.
I can show a five year fix at 4.79%
I believe I am gaining by being at the low rate at the moment and when mortgage rates do start to rise, I then choose my best option.
Lets say I then fix at 4.99%, your right, I'm not as low as I could get right now, I'd be paying 0.2% more, however when you factor in that I'm currently saving 3.19% against the fix at the moment it really is a no brainer to stay on the SVR.

The BoE rate would have to go up to 3.29% for me to be breaking even and many experts are not predicting that to happen for a long time, certainly not before the end of next year.

Of course when it does start to swing, I will be primed to make that re-assessment

RDB

chucky wrote: »

How does that apply to the 80's? I remember you could get a lovely house for £20 and really really nice house for £40K. If you didnt mind a bit of renovating an average house for £10.

Yes wages were less, but not that much less when compared with wages house prices today.

I think you will find in the 80's you could buy an average house for less than £20K.

But lets not let facts get in the way of a good story eh chuck?

I would love to know what point you are trying to make? You seem to be agreeing with me that houses are way over valued at the moment?

chucky

RDB wrote: »

I think you will find in the 80's you could buy an average house for less than £20K.

But lets not let facts get in the way of a good story eh chuck?

I would love to know what point you are trying to make? You seem to be agreeing with me that houses are way over valued at the moment?

facts? which facts? you remembering in your imagination the average house price in the 1990s isn't fact. sorry to disappoint....

once you get me a video on youtube or the price of houses compared to gold i might start to take you seriously instead of ripping the pi$$ out of you

Procrastinator333

IveSeenTheLight wrote: »

I don;t think mortgage rates will shoot up.
It certainly worth doing the research and knowing when the signals first start showing.
Sure you may not get the absolute, categoric low rate, but then this is the weighting factor against how much you gain by being on a low SVR.

Right now my rate is 1.6%.
I can show a five year fix at 4.79%
I believe I am gaining by being at the low rate at the moment and when mortgage rates do start to rise, I then choose my best option.
Lets say I then fix at 4.99%, your right, I'm not as low as I could get right now, I'd be paying 0.2% more, however when you factor in that I'm currently saving 3.19% against the fix at the moment it really is a no brainer to stay on the SVR.

The BoE rate would have to go up to 3.29% for me to be breaking even and many experts are not predicting that to happen for a long time, certainly not before the end of next year.

Of course when it does start to swing, I will be primed to make that re-assessment

if they were to start to turn, I think it would b far higher than a 0.2% difference, but that is speculation.

it also depends on circumstance, would I fix from a rate of 1.6%, no chance. But that isn't the decision a lot of people have.

As a potential ftb at some point, I'm almost certainly going to fix, I don't believe there will be over a 3% difference and even if there was I would still look to fix. While I attach a low probability to greatly increased mortgage rates, it isn't impossible and as a ftb I would have a very large debt. I'm usually quite willing to take risk, but not in such a case where the downside is so vast.

Slightly digressing, but hey.