The time-bomb ticking under Britain's house prices

Graham_Devon

RenovationMan wrote: »

Graham, your falling into the trap of viewing the world through your own circumstances, and perhaps your peers. The reality is that for every one person like yourself stuck on SVR there are many times more who arent.

Many wont be able to get better mortgages. MOST will.

p.s. Sorry to hear about your mortgage troubles, though I cant believe your not a bigger low interest rate cheerleader than me especially if you have had rates at 7.75%!

I'm not falling into any trap.

I often listen to five live on the way home from work. I'm listening to the economists. This is what they are saying. Even the estate agents are saying if rates go up it's going to be tough.

It does not matter if "most" will be able to get better mortgages. We can't ignore the group that can't. That group can be smaller, and have a larger affect on the economy.

Most people are in work. But if you get 4m unemployed, were all screwed. You can still say "most are in work". But it makes not a jot of difference. The smaller group that are not in work bring the rest down. That's just the way it is.

Interest rates don't really bother me. The mortgage is tiny. I opted for a smaller mortgage when buying. The cost of getting to work costs me more than my mortgage each month....so fuel is my thing!!

Cleaver

Graham_Devon wrote: »

No. False.

Many of those people you talk about, and I, at least, am talking about the thousands who bought recently, say within the last 5-6 years, will have been fixed at a certain rate.

Many of those now, due to negative equity, wil not be able to fix.

Take a look at myself. Was on a 4.5% fix. Then went to 7.75%. Now dropped to 3.5% (getting some money back now apparently).

I won't be able to fix again. They will require that I have a LTV rate, but I don't. The house has fallen in value. I will have to stay on SVR.

You may find that as base rates start to rise, more fixed rate products will hit the market to keep up with demand for them.

What LTV do you have in your home? There are a lot of four and five year fixes out there for around 5% to 5.5% for people who have 20% equity, which will be the majority of people.

I believe Natwest mand RBS have a product which is a five year fix at 6.19% for people with just 10% equity. It seems that if people feel that rates are going to go up drastically and that products will all disappear, then there are options out there. I'd be taking a deal like that if I only 10% equity in my home.

Cleaver

Graham_Devon wrote: »

I often listen to five live on the way home from work. I'm listening to the economists. This is what they are saying.

Ahh, Five Live. The place for the world's greatest economists.

Graham_Devon

Thanks cleaver, but as I say, my mortgage is tiny. It wouldn't be worth the fee's to sign up to products to fix.

Still, were talking about products now. I guess we will just have to wait, watch, and see what really happens when rates go up. Fixes are already going up, without base rates rising. I simply cannot see how when base rates do go up, mortgage fixed rates will stay the same.

A year ago, people with 10% equity could fix for roughly 5.2%. It's gone up 1% without base rates rising. Let alone with them. The majority of the population will only look at fixing when base rates have risen. Hence so many are now on SVR.

DervProf

GHOUL_BUSTER wrote: »

Prices are still on the up where I live. Keep dreaming Ghouls

Yes, but most of us want to live on planet Earth.

Cleaver

Graham_Devon wrote: »

Thanks cleaver, but as I say, my mortgage is tiny. It wouldn't be worth the fee's to sign up to products to fix.

What's your problem then?

Graham_Devon wrote: »

Still, were talking about products now. I guess we will just have to wait, watch, and see what really happens when rates go up. Fixes are already going up, without base rates rising. I simply cannot see how when base rates do go up, mortgage fixed rates will stay the same.

A year ago, people with 10% equity could fix for roughly 5.2%. It's gone up 1% without base rates rising. Let alone with them. The majority of the population will only look at fixing when base rates have risen. Hence so many are now on SVR.

Oh, I don't think they'll stay the same, I think they will rise in line with the BOE base rate. And I agree that a significant minority will be financially f*cked because of it. But I'm going to sound like a stuck record here as I always seem to be saying this on here, but we'll find ourselves on some form of middle ground. There isn't a 'timebomb' but nor will everyone be fine and dandy. They'll be problems for some, but most will find mortgage products that are okay and affordable. I'm fence sitting I guess.

shortchanged_2

StevieJ wrote: »

They also weirdly assume that people on low interest rates are going to take a battering when rates go up even though nearly all those mortgage holders had mortgages when BR was at 5% and above.
Its 'make hay while the sun shines' for most.

Because the cost of living has gone up and wages in general are not.

In the next year or so, many people are going to start to feel the squeeze on their household finances.

And before some of you jump on the wagon, note I said many, not all.

geneer

RenovationMan wrote: »

Graham, your falling into the trap of viewing the world through your own circumstances, (and perhaps your close peers) and deciding this is the case generally. The reality is that for every one person like yourself stuck on SVR there are many times more who arent.

Falling into your own trap RM?

Who are these "many" you speak for.
Names and addresses please.

geneer

Cleaver wrote: »

Ahh, Five Live. The place for the world's greatest economists.

Certainly better than MSE Bull FM.

JonnyBravo

geneer wrote: »

Falling into your own trap RM?

Who are these "many" you speak for.
Names and addresses please.

You can put my name down. I'll pass on supplying the address. You strike me as an obsessive sort and you can't be too careful.

geneer wrote: »

Certainly better than MSE Bull FM.

Ah diddums. Did some nasty people disagree wiv you?