House price correction - Taking the hard route

CLAPTON

TruckerT wrote: »

Many of the antiquated procedures involved in 'property' transactions stem from medieval ideas about 'property' ownership which bear little relevance to modern ideas of house purchases and sales.

The idea that lenders should be able to vary their interest rates at will goes against modern ideas of consumer rights.

TruckerT

As I explained before and you seem to have understood, banks lend YOUR money and people like you (which you have lent to them)


so how much would you be willing to lend for 25 years and at what fixed rate?

TruckerT

CLAPTON wrote: »

As I explained before and you seem to have understood, banks lend YOUR money and people like you (which you have lent to them)

Your ideas are laudable, and were enshrined in the Building Society ethos and the Co-operative movement.

But the Building Societies have mostly converted themselves into Banks, as part of their response to a changing world.

Apart from the introduction of HM Land Registry, the centuries-old conventions of property transfers remain more-or-less intact.

Those conventions, including the idea of variable mortgage interest rates, have no justifiable place in the modern world of consumerism (except to enhance the profitability of the lenders, the legal profession, and estate agents).

TruckerT

pqrdef

Conrad wrote: »

Well above 99% of owners sustain a mortgage no matter where rates go. Plenty of us managed rates of about 6/7% for long periods in the past.

If I take out a mortgage at 5% and it goes up to 7%, my interest payments go up 40%. But if I take out a mortgage at 3% and it goes up to 6%, my interest payments double. Don't you point this out to your customers?

Anybody taking out a mortgage at the best current rates needs to be looking at payments which are less than half what they could afford. Otherwise they're part of the Great Mortgage Time Bomb. Which Gideon is now helping people to join.

CLAPTON

TruckerT wrote: »

Apart from the introduction of HM Land Registry, the centuries-old conventions of property transfers remain more-or-less intact.

Those conventions, including the idea of variable mortgage interest rates, have no justifiable place in the modern world of consumerism (except to enhance the profitability of the lenders, the legal profession, and estate agents).

TruckerT

Certainly true that the principles of buying and selling have been unchanged for thousands of years (one party sells and the other buys as an agreed price).
I believe this still happens in this modern world of consumerism and I suspect will be continue for some time.


Knowing as you do that banks have no money of their own are you prepared to lend to banks at fixed rates for 25 years so they in turn can lend on mortgages?

I do struggle a little to know how solicitors and estate agents gain from variable rather than fixed interest rates on mortgages.

CLAPTON

pqrdef wrote: »

If I take out a mortgage at 5% and it goes up to 7%, my interest payments go up 40%. But if I take out a mortgage at 3% and it goes up to 6%, my interest payments double. Don't you point this out to your customers?

Anybody taking out a mortgage at the best current rates needs to be looking at payments which are less than half what they could afford. Otherwise they're part of the Great Mortgage Time Bomb. Which Gideon is now helping people to join.

100,000 mortgage
at 3% costs 473 pm
at 5% costs 578
at 6% costs 636
at 7% costs 693

TruckerT

CLAPTON wrote: »

Certainly true that the principles of buying and selling have been unchanged for thousands of years (one party sells and the other buys as an agreed price).
I believe this still happens in this modern world of consumerism and I suspect will be continue for some time.


Knowing as you do that banks have no money of their own are you prepared to lend to banks at fixed rates for 25 years so they in turn can lend on mortgages?

I do struggle a little to know how solicitors and estate agents gain from variable rather than fixed interest rates on mortgages.

The housing market, uniquely, requires a long, complicated and frequently unnecessary set of procedures before a sale is completed, during which time the 'agreement' on price can be revoked at any time for any reason by any party.

The 'we buy any house' dealers don't concern themselves with those procedures - they live in the world of consumerism, and complete their deals within days.

With the growing tendency of older people to 'spend the inheritance', and the growing inability of younger people to deal with the !!!!!!!! which fuels the housing market, there is a lot to be said for the idea of selling houses on the HP.

As you know, most people cannot do simple arithmetic - they just look at the monthly outgoing, and do not consider the long-term total cost. They don't really understand about short-term fixes etc - they just complain when the 'price' goes up.

Just as energy suppliers are being forced to move towards an understandable pricing structure, so should mortgage lenders.

TruckerT

HAMISH_MCTAVISH

CLAPTON wrote: »

100,000 mortgage
at 3% costs 473 pm
at 5% costs 578
at 6% costs 636
at 7% costs 693

Yes, that is what some on here repeatedly fail to realise.

A 100% increase in mortgage interest rates, from 3% to 6%, would result in mortgage repayments increasing by just 34%.

TruckerT

HAMISH_MCTAVISH wrote: »

Yes, that is what some on here repeatedly fail to realise.

A 100% increase in mortgage interest rates, from 3% to 6%, would result in mortgage repayments increasing by just 34%.

Like I said, most people cannot do simple arithmetic, and don't understand what they are signing up to.

TruckerT

CLAPTON

TruckerT wrote: »

The housing market, uniquely, requires a long, complicated and frequently unnecessary set of procedures before a sale is completed, during which time the 'agreement' on price can be revoked at any time for any reason by any party.

The 'we buy any house' dealers don't concern themselves with those procedures - they live in the world of consumerism, and complete their deals within days.

With the growing tendency of older people to 'spend the inheritance', and the growing inability of younger people to deal with the !!!!!!!! which fuels the housing market, there is a lot to be said for the idea of selling houses on the HP.

As you know, most people cannot do simple arithmetic - they just look at the monthly outgoing, and do not consider the long-term total cost. They don't really understand about short-term fixes etc - they just complain when the 'price' goes up.

Just as energy suppliers are being forced to move towards an understandable pricing structure, so should mortgage lenders.

TruckerT

Yes but would you be willing to lend your own money at fixed interest rates for 25 years ?


and which particular processes would do you think are unnecessary?

TruckerT

CLAPTON wrote: »

Yes but would you be willing to lend your own money at fixed interest rates for 25 years ?

I have no money, so the question is redundant. But if I were a banker with access to the savings of millions, I daresay I would be able to cobble together some kind of deal


and which particular processes would do you think are unnecessary?

Local Authority searches spring to mind - the data should be in the public domain, accessible at the click of a mouse. Also, purchasers' questions about the property - these should be dealt with by the purchaser before agreeing to buy - it doesn't need a solicitor to ask the obvious

Obviously, there are still many historical issues which complicate the sale and purchase procedures relating to some properties. But most post-war 'estate' houses have no such complications. The conventions of conveyancing are rooted in a time when property transactions were relatively rare, and the people who lived in the 'smaller' houses were largely unaffected.

TruckerT