House Price Gains 'strongest in 6 years'

jcb208

First time buyer asking prices for small 3 bed house have risen from around £180 k last year to around £200K in our area (South) ,I know as have been tracking them.
Don't know how people can afford to buy any more ,I am on the same money as 6 years ago and the available work in my trade is less.Just glad I bought my house 25 years ago!! even though mortgage rates were hovering between 10-16% which kept house prices down.
Seems to me as the interest rates came down prices rose at an alarming rate.In my opinion the only way prices will come down to an affordable level is if mortgage rates go up a lot which will not happen as a high percentage of people will loose there Home.Other option is to build millions on new homes

wotsthat

Graham_Devon wrote: »

If things are not all that bleak for these people - howcome just a 1% rise would see them unable to service their mortgage? These were, of course, Mervyn kings words, not mine.

They will be able to service their mortgage with some adjustments - do you honestly think that Mervyn King has suggested that a 1% rate rise WILL (rather than COULD) lead to 10% of mortgage holders not paying their mortgages?

There's no doubt (in my mind) that a 1% increase in rates will lead to an increase in distressed mortgage holders but even in your wildest dreams it won't be 10% of mortgage holders.

I don't know why you find it so difficult to comprehend that adjustments can be made. There has been evidence of this as certain benefits have been withdrawn - why can't mortgage holders do it?

You're stuck in a catch 22 - you want rates to rise (despite thinking it'll mean > one million households won't be able to pay their mortgages) but, at the same time, if rising rates will cause such huge problems they won't happen.

It sounds as if you think the economy is much more sensitive to rising rates - maybe that means they won't have to rise as much as they would in the past to have the same effect?

I think this is being over egged even by your standards. Mervyn King, judging by his voting history is far more worried about rates rising too soon rather than too late and this story helps his case. Look how quickly he jumped in to say rates were going nowhere when Bernanke started talking about the end of QE.

Graham_Devon

wotsthat wrote: »

You're stuck in a catch 22 - you want rates to rise (despite thinking it'll mean > one million households won't be able to pay their mortgages) but, at the same time, if rising rates will cause such huge problems they won't happen.

Right - if you think so.

The world ecomony should wait for our indebted household owners to pay down their mortgages.

Indeed.

Not saying that interest rates will rise this week or next year. But to suggest they simply won't rise regardless due to indebted homeowners is taking your rose tinted spectacles to the extremes.

Anyway, calm yourself down. You are really trying to lay in recently.

wotsthat

Graham_Devon wrote: »

Right - if you think so.

The world ecomony should wait for our indebted household owners to pay down their mortgages.

Indeed.

Not saying that interest rates will rise this week or next year. But to suggest they simply won't rise regardless due to indebted homeowners is taking your rose tinted spectacles to the extremes.

Anyway, calm yourself down. You are really trying to lay in recently.

When the BoE are making rate decisions they'll consider the impact that a rise/ fall/ no change may have. If a 1% rise will lead to 1m households unable to pay their mortgages then that needs to be considered against the potential benefits.

If the potential benefits of a rate rise exceed the downside then they'll rise but as a 1% rise would likely lead to another banking crisis it would have to be some benefit.

My 'rose tints' suggest that talk of 1m households unable to pay mortgages if rates rise by 1% is nonsense i.e. rates are less likely to be held back by the swathes of indebted householders.

It's the patented gloom filter that's suggesting devastation if rates rise and therefore making them less likely - why not turn down the settings a bit?

Conrad

Graham_Devon wrote: »

Apparently it just happens, people get by...

There hasn't been an answer to this annoying little question. The

About 17 times you've filtered out the answer.

18. - Annualy over 99% of owners do not get repossessed. There are many ways in which people, yup, muddle through. It's called life.


The rate of repossession down from 0.33% in 2011 to 0.30% in 2012.
https://www.cml.org.uk/cml/media/press/3422

Graham_Devon

wotsthat wrote: »

It's the patented gloom filter that's suggesting devastation if rates rise and therefore making them less likely - why not turn down the settings a bit?

Devastation?

LOL. You do like to exaggerate! But then I guess you have to to make your point.

wotsthat

Graham_Devon wrote: »

Devastation?

LOL. You do like to exaggerate! But then I guess you have to to make your point.

Your version of the story is that 1% rate rises will lead to 10% of household unable to pay the mortgage.

That's more than 1,000,000 households falling into arrears because they won't or can't (according to you) be able to adjust.

Good to see you trying to play it down though and trying out the rose tints - those sort of numbers aren't going to encourage the BoE to deliver the rate rise you're after.

Graham_Devon

wotsthat wrote: »

Your version of the story is that 1% rate rises will lead to 10% of household unable to pay the mortgage.

That's more than 1,000,000 households falling into arrears because they won't or can't (according to you) be able to adjust.

Good to see you trying to play it down though and trying out the rose tints - those sort of numbers aren't going to encourage the BoE to deliver the rate rise you're after.

My version of the story is the same as this version and plenty of others seen in the media.

The eye-watering mortgage debts of homeowners in their 30s and 40s means that the Bank of England cannot raise interest rates without pushing millions of people into an 'unsustainable' position, Sir Mervyn King has warned.

'The significant cohorts of UK borrowers could experience financial difficulties if interest rates were to rise during a period of subdued income growth.'A rise in interest rates without a strengthening in income could significantly increase borrower distress and losses to banks.'

You are taking issue with me, but I'm only looking at what he bank said. This isn't "my version".

grizzly1911

wotsthat wrote: »

When the BoE are making rate decisions they'll consider the impact that a rise/ fall/ no change may have. If a 1% rise will lead to 1m households unable to pay their mortgages then that needs to be considered against the potential benefits.

If the potential benefits of a rate rise exceed the downside then they'll rise but as a 1% rise would likely lead to another banking crisis it would have to be some benefit.

My 'rose tints' suggest that talk of 1m households unable to pay mortgages if rates rise by 1% is nonsense i.e. rates are less likely to be held back by the swathes of indebted householders.

It's the patented gloom filter that's suggesting devastation if rates rise and therefore making them less likely - why not turn down the settings a bit?

Now that you have fixed for another 5 years time for an increase then if it isn't really going to affect borrowers. Start giving some benefits back to the prudent.

I did see something today, can't find it now, that suggests that annuity rates are starting to increase from the pitiful returns currently available.

wotsthat

Graham_Devon wrote: »

You are taking issue with me, but I'm only looking at what he bank said. This isn't "my version".

Your quote makes the position look even worse.

Kiss goodbye to your rate rise if literally millions would find a rate rise unsustainable.

I just don't buy into this story - hence why I've fixed for the next 5 years. Are you going to take a fix?

As an aside I noticed that the MSE newsletter leads with a mortgage warning about rate rises - it's becoming a more mainstream idea. There's a note about being able to 'pre-book' fixed rates with some lenders. Nationwide do this for anyone that's interested - I signed to a 5 year fix but opted for it to start in September.