FTB - Would you?

chucky

Procrastinator333 wrote: »

2-3% is not available to the FTB with 10%.

i should have given more detail but got a bit bored

you could be on 2%-3% once your deal finishes. so going on a Product Variable Rate that is in the T&C's or less likely on a good SVR would give you this. it's a risk but a likely scenario if you expect rates to be low long term.

you can't do it if you go on one of those crazy 4.5% + BOE once your fixed term expires. the choice and rate on your mortgage is fundamental

i don't disagree with your logic but giving you scenarios to put out there for discussion.

also, your theory is dependent on nominal prices being the same. it may not be that predictable.

Procrastinator333

chucky wrote: »

i should have given more detail but got a bit bored

you could be on 2%-3% once your deal finishes. so going on a Product Variable Rate that is in the T&C's or less likely on a good SVR would give you this. it's a risk but a likely scenario if you expect rates to be low long term.

you can't do it if you go on one of those crazy 4.5% + BOE once your fixed term expires. the choice and rate on your mortgage is fundamental

i don't disagree with your logic but giving you scenarios to put out there for discussion.

also, your theory is dependent on nominal prices being the same. it may not be that predictable.

What products drop to 2-3% once the fix finishes? Do they not revert to the lenders svr?

4.5% + BoE after the term :eek: That is a scary thought! :eek:

My expectation is that nominal prices are going to be pretty stagnant. It probably only takes nominal hpi of something like 5% to swing it back to buying being the better financial choice. But I'm skeptical on that point and happy to procrastinate some more.

Graham_Devon

chucky wrote: »

D. Wage inflation

That's merely a soundbite.

Everyone else is explaining their thoughts.

I'm really unsure how, in this climate, enough wage inflation could be found to actually help increase house prices. Would take quite a bit of inflation.

Someone on 26k receiving a 2.5% wage increase would get another £650 a year. Can't really see these amounts amounting to much, if any difference to an uplift in HPI. So can you explain how you do?

Add on the fact that NI has gone up for employers, plus other taxes have and will go up, thousands of part timers want full time and there are plentiful supply of potential employees, let alone public sector cuts, I really can't see wage inflation being high on the list of priorities in this climate.

We'd need wage inflation to beat general living cost inflation, such as council tax rises for wage inflation to have any effect....or do you have something else in mind?

chucky

Graham_Devon wrote: »

That's merely a soundbite.

like your whole life i guess... how much wage inflation do you need to make an impact on HPI?

Graham_Devon wrote: »

We'd need wage inflation to beat general living cost inflation, such as council tax rises for wage inflation to have any effect....or do you have something else in mind?

and again - you don't need wage inflation for 100% of the working population to have HPI... it's probably nearer 30% of the population as not every property sells every year. do you not understand that?

Generali

Interest rates are low and look like they're going to stay low for a long time. However, the Bank of England and the Federal Reserve have both added massively to the stock of money. The risk is that if inflation starts to rise it may do so very quickly.

Graham_Devon

chucky wrote: »

like your whole life i guess... how much wage inflation do you need to make an impact on HPI?


and again - you don't need wage inflation for 100% of the working population to have HPI... it's probably nearer 30% of the population as not every property sells every year. do you not understand that?

And the questions? Do you care to answer them or not?

chucky

Graham_Devon wrote: »

And the questions? Do you care to answer them or not?

not sure why i'm bothering but i'll try...

Someone on 26k receiving a 2.5% wage increase would get another £650 a year.

off the top of my head and taking £60 a month from your example - it allows someone to borrow an extra 10k on a 5% mortgage. do you think that may or may not push on HPI?

i'll go back to my original point which you didn't get because you think that wage inflation has to happen across 100% of the population.

house prices can fall in real terms and have notional increases. the reason for this is that a minority of the population have wage increases - not everyone.

chucky

Chaos_A.D. wrote: »

You do make some valid points mate, I just still have this gut feeling that houses in many areas are so grossly inflated that at some point something has to give.

I do accept that 99% of people have to buy with a mortgage. I just feel the outlook is just so risky at the moment, and a huge amount of people have to over extend with joint salaries just to get a basic home, it just can't continue long term.

i agree that they're over inflated and expensive - it won't give just yet... not this time round...

MigsyBigsy

so FTB, yes or no? Not sure if the question was answered?

Procrastinator333

MigsyBigsy wrote: »

so FTB, yes or no? Not sure if the question was answered?

I personally think the FTB will likely be better off by waiting.