One in Five could not afford food if payments rise

ILW

PasturesNew wrote: »

I am close to somebody who is in a good job and didn't overstretch themselves. However, fuel costs have increased, their pay has been frozen and - the worst bit - their employment expenses system changed radically, causing them an extra £300-400 fuel cost per month to do their job. They'd struggle because with all the changes, including that one, they're probably spending £600/month more now than they were when they bought the house 2 years ago.

Their problem is the job, not the mortgage rate.

Graham_Devon

PasturesNew wrote: »

I am close to somebody who is in a good job and didn't overstretch themselves. However, fuel costs have increased, their pay has been frozen and - the worst bit - their employment expenses system changed radically, causing them an extra £300-400 fuel cost per month to do their job. They'd struggle because with all the changes, including that one, they're probably spending £600/month more now than they were when they bought the house 2 years ago.

Yep...this.

It's the constant ebbing away at income that's crippling. I'm certainly spending more on living (car / home costs) in total than I was 5 years ago, and that's WITH lower rates, which I have benefitted from.

Just my car insurance is over double what it was 3 years ago. The car is also a lower insurance group as it's been changed 2 times since.

May not seem much, but after paying £35 a month for a high end, high speed car, paying £68 a month for a dog of a family car isn't my idea of fun. No accidents, no claims, no points (infact thinking about it, I also had 6 points on the licence 3 years ago...all gone now).

chucky

ILW wrote: »

Their problem is the job, not the mortgage rate.

That's what I think, most people's issues aren't the mortgage rate or the mortgage repayment(they can switch to interest only or take mortgage holiday) but other things that are not price controllable like fuel, food or even gas/electricity.

ILW

Graham_Devon wrote: »

Yep...this.

It's the constant ebbing away at income that's crippling. I'm certainly spending more on living (car / home costs) in total than I was 5 years ago, and that's WITH lower rates, which I have benefitted from.

Just my car insurance is over double what it was 3 years ago. The car is also a lower insurance group as it's been changed 2 times since.

May not seem much, but after paying £35 a month for a high end, high speed car, paying £68 a month for a dog of a family car isn't my idea of fun. No accidents, no claims, no points (infact thinking about it, I also had 6 points on the licence 3 years ago...all gone now).

Oddly enough, this is the types of inflation that the BoE should have some control over. Cannot be blamed on world prices at all.

StevieJ

alleycat` wrote: »

I'm waiting for the humorous comment about how they could all stand to eat less anyway as we are all obese too.

I was tempted, but that would be in poor taste

MacMickster

wotsthat wrote: »

Some of these surveys really are crap. Have 25% of mortgage holders really told Which that if their mortgage went up by £50 they'd be unaffected and wouldn't need to cut back on spending, reduce saving and would continue to have enough to spend on essentials?

What are they going to do? Magic £50 out of thin air?

Perhaps 25% of mortgage holders (I wish it was more) had the foresight to overpay their mortgage each month, to both benefit from the current low interest rates and to ensure that their current actual monthly payment will cover any increase in mortgage rates to more normal levels.

Linton

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.

Sounds a really good idea. If global interest rates go up, the bank has to bear the extra cost of providing you the cheap money, if interest rates go down the banks lose the extra income as you transfer the mortgage elsewhere. Looks like the mortgagee wins whatever happens.

Only snag is which bank would agree to such a deal?? Hope its not one holding my savings!

Caveat_Mortgagor

alleycat` wrote: »

That is assuming the majority of them haven't spent the money on "tat from the high street" that they could have saved when mortgage rates dropped like a stone.

It also assumes the people making money from these poor suckers (as we'd believe they all are) haven't put that money back into the economy and have mysteriously stuffed it under the mattress.


I don't know the truth of any of it but i hate over simplifications of a complex issue to push a single point or agenda.

They didnt need to save, the pile of bricks was supposed to magically make them rich.

Your point seems to be to accept that diverting such significant sums of the mortgagors income towards housing is an acceptable misallocation because it would have been possible for some of this money to have been wasted if spent in other ways. Conveniently this ignores the fact that much of it could have been spent productively. ie Better to guarantee huge percentages of incomes are diverted to housing than to give the mortgagors a free choice to spend wisely or waste when spent in another industry.

Its not the strongest position to argue!

ILW

Linton wrote: »

Sounds a really good idea. If global interest rates go up, the bank has to bear the extra cost of providing you the cheap money, if interest rates go down the banks lose the extra income as you transfer the mortgage elsewhere. Looks like the mortgagee wins whatever happens.

Only snag is which bank would agree to such a deal?? Hope its not one holding my savings!

I am sure the banks could provide such an offer, but would need to price in the long term risk. Cannot see their being many takers for a 10% lifetime mortgage though at the moment.

paulmapp8306

Not taking sides, but as Im buying at present - for me.

Mortgage = £460/month
Rent (for a similar property) £650/month

So - I can more eaily affor a £100 increase in the cost of my mortgage than pay rent. In fact I can afford a £200 increase in my mortgage before renting makews sense.

That still doesnt meam £100 extra out might (or would) make life tough (or tougher), renting would actually make it worse. Its the cost of housing REGARDLESS of renting or buying causing the issues.