People will adjust their spending habits in order to afford their mortgage

noodle_doodle

there was 467 of us living in a hole in the ground with just a piece of corrugated iron as a roof, but we were happy

Graham_Devon

michaels wrote: »

Graham

I bought in 2010

I am debating whether to swap my offset base +1.99% rate for 2.49% fixed for 5 years....but now I'm not sure if it is worth it as the BoE have announced rates will remain low for an extended period.

I can not understand what you are worrying about?

Oh well, fear not! Michaels is ok!

Ronaldo_Mconaldo

Graham_Devon wrote: »

Oh well, fear not! Michaels is ok!

He's ok and so are lots of other people. For all those people who might just not be ok and don't even realise it, well they have people like you to worry for them. So we're all covered.

ruggedtoast

A 1% rise in interest rates would tip many people, and by default, the reckless, insolvent, stupid banks who lent to them, over the edge.

As the UK's entire economic reason to exist appears to hinge solely around the mandate to make sure that banks and the people who run them need never experience one iota of the daily reality that faces every other commercial organisation in the world, I predict rates will probably stay where they are for a while.

grizzly1911

Graham_Devon wrote: »

Jackie, I agree with everything you say.

Unfortunately I feel the government is encouraging people to get into the market without taking any notice of all this.

Again, unfortunately, it won't just be these people effected. It will be all of us. For a start, 20% of our cash as collective taxpayers invested in the house! Secondly, potential problems such as this, disregarded by those in the business as "well they will just adjust" effect us all. We are living through the problems caused by the last mess up caused by the few while chasing the gold at the end of the rainbow and encouraging higher and higher debt to "get in now".

I am not a fan of the help to buy schemes.

I am only speculating but:-

Aren't mortgage providers and brokers regulated?

Don't they have to warn prospective borrowers of the risks they are entering into?

Do they follow those up with written warnings even if generic?

Don't the mortgage providers undertake a credit risk assessment of the prospective borrower? Is this just cursary or do you think they may factor in a degree of flex,on affordability analysis, as rates are so low. There would be little point lending if the borrower is likely to default the next time Bernanke sneezes.

The borrower has a responsibility too - (I know the temptation may be too much - the allure of those shoe boxes and all).

Lastly if the punters are so desperate that they are willing to pay over the odds, CBA to save and gamble then they only have themselves to blame if things go t*ts up.

Cornucopia

I agree that housing costs in the UK are too high. And I think there are some systematic flaws in the system from planning onwards that promotes these high prices.

However, I think this relentless clutching at straws negativity is ridiculous. The whole point of this forum is saving money - are we really going to struggle to find £177 extra per month? Seriously?

I would advise the OP to study some of the debt management threads on this forum, and then come back and tell us that people can't make sacrifices.

Graham_Devon

Cornucopia wrote: »

However, I think this relentless clutching at straws negativity is ridiculous. The whole point of this forum is saving money - are we really going to struggle to find £177 extra per month? Seriously?

Well I put the general budget up for people on a certain income and certain mortgage borrowing.

Have a look, see if you could save it. It;s very easy to speak from ones own personal position. Quite a bit harder to actually reconstruct a budget.

It might not be much to you, but £177 is a lot of money to a lot of people.

On this forum it seems we have the same peopl suggesting rates won't rise because it would cause too many problems, but at the same time, batting down any debate (usually by trying to make it look as if the poster has issues) about the problems people would face if rates rose.

CLAPTON

Graham_Devon wrote: »

Out of interest how do you cut down on car expenses?

Gas, electric, water and landline, yes, could be cut down a couple of hundred quid, though you'd really struggle, for a family of 3-4. At least IMO. Unless we are going without a landline too now?

well the AVERAGE person in the target situation does NOT have a car loan

the AVERAGE person does not have to do 10,000 miles as these would include holidays, days out, visits, un-necessary journeys etc etc
10 million people live in London who don't need a car (plus of course many other cities


the AVERAGE person in these circumstances does NOT have 2 children

the AVERAGE person has parents who would help out in extremus

etc etc

Graham_Devon

CLAPTON wrote: »

well the AVERAGE person in the target situation does NOT have a car loan

the AVERAGE person does not have to do 10,000 miles as these would include holidays, days out, visits, un-necessary journeys etc etc
10 million people live in London who don't need a car (plus of course many other cities


the AVERAGE person in these circumstances does NOT have 2 children

the AVERAGE person has parents who would help out in extremus

etc etc

Really?

Seems to me you are just stating this rather than having it backed up with anything. Nearly everyone I know finance their second hand cars on a loan. They are not going crazy, these are 3-4k cars.

The initial outlay is too much otherwise. And theres no point about going on about £1,000 cars. They are that much for a good reason. 10,000 miles a year is hardly excessive. Outside of cities, people travelling 15 miles to work and 15 miles back is very much the norm (allowing for extra trips to the shops and the like).

London is an exception, very much NOT the rule.

And stating that the average family doesn't have kids is plain absurd. So is the fact that you appear to assume parents can and will help out month after month after month.

I'm on the cautious side granted, but some of the stuff you are saying is so far away from the norm I see it's beggars belief....for instance, your assumption everyone buys cars outright and they have £70 sky subscriptions to simply axe.

CLAPTON

Graham_Devon wrote: »

Really?

Seems to me you are just stating this rather than having it backed up with anything. Nearly everyone I know finance their second hand cars on a loan.

The initial outlay is too much otherwise. And theres no point about going on about £1,000 cars. They are that much for a good reason.

London is an exception, very much NOT the rule.

And stating that the average family doesn't have kids is plain absurd. So is the fact that you appear to assume parents can and will help out month after month after month.

We were NOT discussing the AVERAGE person/family but the average person is a specific house price bracket. (hint many don't have children)

London plus other cities are NOT the exception (look up the facts about the number of people that live in cities and those the don't).

Consider how many people NEED a car (compared to those that WANT a car)

Many many many parents will help out if ESSENTIAL to stop their children and grandchildren becoming homeless.


cut all the rubbish out

taking everything in consideration do you or do you NOT expect there to be massive number of repossessions when interest rates rise?