One in Five could not afford food if payments rise

Loughton_Monkey

I still can't decide which irritates me the most. The idiot organisations who research this cr&p, or the media who sensationalise it dressed up as 'news'.

Unless you live on mars, you know two facts. 1. The only way interest rates are ever going to move is upwards. They can hardly go down. 2. Any household who finds increases in costs of £100 a month are not going to be pleased about it. Either some other expenditure needs to reduce, or they have less to save for the future.

Times are hard. In how many ways do we need to ram it down each others' throats? Why do the media need to say virtually the same thing every time petrol goes up, or gas prices, or train fares. Or wages are frozen?

Those who sail so close (financially) to the wind have generally taken out mortgages they couldn't afford. And to use such words as "devastating" and "disaster" gives us rather a challenge in how to describe such things as the Japanese Earthquake just over a year ago.

Recessions exist to teach people things that used to be common sense. Don't spend more than you earn. Budget wisely. Save for rainy days....

alleycat`

You wouldn't get a lifetime fixed rate at less than 5%, you'd be lucky to get something like that at less than 8% and that is the crux of the problem.

The exit fees would be horrific, the upfront fees would be horrific and the rate would be, relative to current rates, also horrific.

the_flying_pig

RenovationMan wrote: »

Lack of competition in the mortgage market, resulting in the largest lenders pushing out smaller or niche lenders and forming a cartel to dictate mortgage rates to the benefit of the lender and the detriment of the borrower? ...

i assume that was meaningless, right? how does having a mix of fixed & variable rates out there promote competition? IMO you'd tend to get stronger competition on price [rates] if it was totally straightforward to compare prices. the great unwashed has no chance of working out whether a fix at X% is a better deal than paying the base rate + Y%. at best it makes no difference.

RenovationMan wrote: »

...Lack of flexibility for those who manage their mortgage as capably as they manage their other savings and investments and are seeking the most tax efficient way to structure their finances?...

dunno what you mean. to be fair my post conflated two things, namely 'repayment' & 'fixed rate', so i'm not sure which of the two you're commenting on. but in any case these seem like very niche reasons, that apply to a very small niche of borrowers. let niche lenders spring up to serve their needs. i'm talking about countless millions of sheep households sleepwalking into IO, or into variable rates that they won't be able to afford if the central bank decides to get tough on inflation. that's what causes economic & social problems on a large scale, & avoiding this [rather than having to resort to socially unfair measures like ZIRP & SMI] is a lot more important than a few niche borrowers' flexibility.

the_flying_pig

alleycat` wrote: »

You wouldn't get a lifetime fixed rate at less than 5%, you'd be lucky to get something like that at less than 8% and that is the crux of the problem...and the rate would be, relative to current rates, also horrific.

that's because the banks would be taking on an awful lot of interest rate risk.

but under the status quo that risk hasn't gone away. it's just sitting with householders, well, to be more accurate, with taxpayers & savers.

banks must be best placed to take it on.

The_White_Horse

I think all residential mortgages should be fixed rate for the full term - but with no tie ins (or relatively small ie 2 years) - and then you can move without penalty to a cheaper deal, if you can find one. that way, people would have security for life.

ILW

The_White_Horse wrote: »

I think all residential mortgages should be fixed rate for the full term - but with no tie ins (or relatively small ie 2 years) - and then you can move without penalty to a cheaper deal, if you can find one. that way, people would have security for life.

Nice idea, the problem is that the rates would have to be much higher than at present.

Graham_Devon

The article is a lot of twaddle.

I once heard that people often answer polls with a leaning bias. I.e. instead of answering the question truthfully, they answer the question in the hope that it will sway the results and show a different answer.

In this case, many could be stating they will not be able to buy food as once out in the press, they may hope the government will take note and take action to stop increases etc.

Not sure if that would be the case, but I'm sure it would be for some. The research was looking at polls surrounding benefits, and how those who hoped they would receive more in benefits, answered the questions to show they "needed" more in order to try and sway the results, when actually, they didn't "need" more at all....of course, it would always be nice to have more.

People always make themselves look worse off than they are when it comes to these sorts of things.

ILW

Why is there less fuss about rising rents?

ILW

SirRee wrote: »

Because no one is trapped in rising rents. If the tenant cannot afford to live in a desirable property then they can simply move. It's no biggie.

Same with purchasers, the vast majority can sell up and move to something cheaper.

alleycat`

ILW wrote: »

Same with purchasers, the vast majority can sell up and move to something cheaper.

I suspect the "cost" for someone to sell up and move is quite significant compared to a renter moving.

Maybe i'm wrong but that would be my general opinion of it.