London Has Peaked

HAMISH_MCTAVISH

stu007 wrote: »

You are aware that these historic low interest rates most likely won't last the entirety of a 25 year mortgage?

You are aware that these historic low interest rates give most people the ability to overpay and ensure the mortgage is cleared well before 25 years?

stu007

HAMISH_MCTAVISH wrote: »

You are aware that these historic low interest rates give most people the ability to overpay and ensure the mortgage is cleared well before 25 years?

Yes. It's always prudent and wise to clear your most expensive debt first, so if your only debt is your mortgage, then absolutely it is the correct decision to take advantage of the low rate to pay it down.

However it's also somewhat naive to make a decision on a mortgages affordability solely looking at the current low rates and not thinking what will happen when rates eventually rise.

wotsthat

stu007 wrote: »

Yes. It's always prudent and wise to clear your most expensive debt first, so if your only debt is your mortgage, then absolutely it is the correct decision to take advantage of the low rate to pay it down.

Don't see much wisdom in paying down a mortgage when, these days, I can get a better savings rate on a current account than I'm paying on the mortgage.

stu007 wrote: »

However it's also somewhat naive to make a decision on a mortgages affordability solely looking at the current low rates and not thinking what will happen when rates eventually rise.

Don't most people know that higher interest rates may lead to higher mortgages? Some around here used to worry people would 'forget' that interest rates can rise but it's been hard to miss the media frenzy of the last 18 months about the potential for interest rates to do that very thing.

lisyloo

However it's also somewhat naive to make a decision on a mortgages affordability solely looking at the current low rates and not thinking what will happen when rates eventually rise.

Doesn't MMR use 7%, so even if naive individuals want to do that, they won't be allowed to borrow unless they can afford it at much higher rates.

tkane

tkane wrote: »

Yes 400k for an entire house will look like a bargain in a few years. I enquired about the flats for sale in Chobham Manor in Statford - £375k for 1bed and £550k for 2beds. INCREDIBLE.

Further to my comment above, there is an article on the Evening Standard tonight which I just saw whilst on the tube that buyers were queing up since yesterday to buy up these flats at those prices.

So much for "London has peaked".

stu007

lisyloo wrote: »

Doesn't MMR use 7%, so even if naive individuals want to do that, they won't be allowed to borrow unless they can afford it at much higher rates.

If your fixing for 5 years or longer your application is exempt from mmr, so that wouldn't work in all cases

padington

tkane wrote: »

Further to my comment above, there is an article on the Evening Standard tonight which I just saw whilst on the tube that buyers were queing up since yesterday to buy up these flats at those prices.

So much for "London has peaked".

Saying london has peaked is like saying 'the global capital of the world, a rare city that uniquely pioneers a combination of technology, finance and culture like no other which can hardly be built on with an enourmous expected increase of population over the next generation or two and which is entering a good economic period has peaked'.

It's actually hard to say with a straight face

Bubble_and_Squeak

mortgage lending declining
transactions declining
property taking longer to sell
but the bulls are still bullish
OH BUT THERE WAS A QUEUE AT TOTTENHAM HALE!
the only way they could be buying new build rubbish is with fractional ownership

padington

Bubble_and_Squeak wrote: »

mortgage lending declining
transactions declining
property taking longer to sell
but the bulls are still bullish
OH BUT THERE WAS A QUEUE AT TOTTENHAM HALE!
the only way they could be buying new build rubbish is with fractional ownership

Says the Greek who is desperately trying to buy London property before the election. :rotfl:

Shame bubles missed the second best year for buying properry since 1980.

Property has climbed on average 6.9 % a year in London since 1980. Only a brave man swims against that tied and even you bubles, our resident ' bear' doesn't want to swim it either.

Funny that.

http://www.dailymail.co.uk/money/mortgageshome/article-2921526/House-prices-risen-6-9-year-1980-according-ONS.html

6.9 % a year average plus possible yield. All during a time of historically low interest rates.

It's what they call, a no brainer.

Bubble_and_Squeak

padington wrote: »

Saying london has peaked is like saying 'the global capital of the world, a rare city that uniquely pioneers a combination of technology, finance and culture like no other which can hardly be built on with an enourmous expected increase of population over the next generation or two and which is entering a good economic period has peaked'.

It's actually hard to say with a straight face

has your neighbours sale gone through yet?
got two anecdotes:
bloke at work who won a bidding war in hertfordshire but needed to sell his house in enfield but couldn't has finally thrown in the towel after the BTL option hit a dead end.
another bloke at work who lost a bidding war but won a reprieve when the victor couldn't get the mortgage found that he himself couldn't get the mortgage.
i would imagine this scenario is playing out all over london as we hit an affordability ceiling. or maybe its a two-ff.