House Price Crash Discussion Thread

Generali

kingkano wrote: »

!!!!!! is a mortgage q?

Is that shorthand for queue as in you are on a waiting list for a mortgage? Otherwise not being a housebuyer in the 70s I have no idea and need it explained. Many thanks.

Funds available to borrow for a mortgage used to be very restricted as building societies could only lend savers' funds, they couldn't borrow in the money markets. I also believe that banks couldn't offer mortgages although some non-financial institutions could (my parents' first morthgage was through ILEA - the Inner London Education Authority).

Generally speaking, you had to have a good deposit, save the equivalent of a months mortgage payment each month for a year with the BS and be a long-standing customer to get a mortgage.

Even then sometimes not enough funds were available so you'd have to wait for the money you wanted to borrow to become available.

Rowey

I'm new to money saving forums so have no idea if this is the right thread to put this under so apologies if not!
My fixed rate period is about to end at the end of May and I want a simple remortgage but banks are withdrawing products almost on a daily basis and I don't know whether to commit myself now to a product with quite a high interest rate or hang on for a bit longer and see whether things settle down a bit.
Any advice gratefully appreciated!
Thanks

Generali

Rowey wrote: »

I'm new to money saving forums so have no idea if this is the right thread to put this under so apologies if not!
My fixed rate period is about to end at the end of May and I want a simple remortgage but banks are withdrawing products almost on a daily basis and I don't know whether to commit myself now to a product with quite a high interest rate or hang on for a bit longer and see whether things settle down a bit.
Any advice gratefully appreciated!
Thanks

Personally, I'd be inclined to jump in now as I suspect things will get a lot worse before they get better. FWIW, I'd be looking at a long term fixed rate with as low a redemption as I could find.

pickledtink

Rowey wrote: »

I'm new to money saving forums so have no idea if this is the right thread to put this under so apologies if not!
My fixed rate period is about to end at the end of May and I want a simple remortgage but banks are withdrawing products almost on a daily basis and I don't know whether to commit myself now to a product with quite a high interest rate or hang on for a bit longer and see whether things settle down a bit.
Any advice gratefully appreciated!
Thanks

Probably better to post this in the mortgage thread.
For what it's worth I'd start looking really hard at your options. I'm no expert but it doesn't look like things will improve by the end of May regarding rates.

WTF?_2

Rowey wrote: »

I'm new to money saving forums so have no idea if this is the right thread to put this under so apologies if not!
My fixed rate period is about to end at the end of May and I want a simple remortgage but banks are withdrawing products almost on a daily basis and I don't know whether to commit myself now to a product with quite a high interest rate or hang on for a bit longer and see whether things settle down a bit.
Any advice gratefully appreciated!
Thanks

Interest rates are likely to fall in the short term (12-18months) and rise sharply thereafter, IMO.

Reasoning: The govt/BoE wants to head off a recession so rates will go lower. However, this will stoke inflation and force a hike in rates once it starts to bite and the public start really complaining.

However, don't expect mortgage rates to go down with headline base rates. The lenders are desperately short of cash and no-one wants to invest in mortgage lending right now due to the sub-prime experience in the US and lack of confidence in the direction of the UK house market.

Bear in mind that your lenders SVR could be quite a bit above base rates so you could be looking at going to a 6% or higher repayment rate straight off the bat.

Remember to take into account arrangement fees as IMO the whole short term fix thing is a bit of a con when you crunch the numbers.

merlinthehappypig

!!!!!!? wrote: »

Interest rates are likely to fall in the short term (12-18months) and rise sharply thereafter, IMO.

Reasoning: The govt/BoE wants to head off a recession so rates will go lower. However, this will stoke inflation and force a hike in rates once it starts to bite and the public start really complaining.

However, don't expect mortgage rates to go down with headline base rates. The lenders are desperately short of cash and no-one wants to invest in mortgage lending right now due to the sub-prime experience in the US and lack of confidence in the direction of the UK house market.

Bear in mind that your lenders SVR could be quite a bit above base rates so you could be looking at going to a 6% or higher repayment rate straight off the bat.

Remember to take into account arrangement fees as IMO the whole short term fix thing is a bit of a con when you crunch the numbers.

I agree with this, though, for many people, I suspect a SVR of around 6% will be a bit of a pipe dream.

Certainly, the headline rate needs to be taken with a pinch of salt. We had the choice of a 10 year fix at either 5.9% without arrangement fees (and no valuation fee) or 5.5% with fees. When you look at the numbers the higher rate works out at nearer 5.3% over the period, if you save the arrrangement fee and apply the compound interest.

That might not seem much, but it adds up over the years.

Most people also add the arrangement fees to the loan and forget that they then need to pay interest on this as well.

We realise that we might lose out in the short term by fixing, but it's difficult to put a price on peace of mind. We are viewing it as 10 years rent at a fixed price and will be saving alongside the repayments so that we are in a position to pay it off by the time the fixed rate ends or earlier.

PasturesNew

If interest rates go much lower, I'll be tempted to buy a Maserati and enjoy my sodding money.

merlinthehappypig

Sure, that gives some perspective about buying (presumably in 1997 or even 1987) rather than renting.

Given the HPI over that period I can't see anyone disagreeing that buying was the best option.

Most of the discussions on here are about the merits of buying v renting now, not 10 or more years ago.

The fact that you have done very nicely out of buying over that period bears no relation to the situation now, when rents are low (compared with house prices), interest rates are, on the whole, still very good for savers and house prices are reducing.

Thali

Ok ...

We've agreed to buy our flat in October 2007 and completed in February 2008.

The flat is in SW London and just below stamp duty but we actually paid 2k on top for FF.

Am I able to sleep at night? Yes, because I've got an interest rate other people are only dreaming of, fixed for the next 5 years and we do not have to stretch ourselves to come up with the monthly repayments.

Do I worry about the HPC? Sure! Next door is a new development with "luxury 1/2 bedroom flats". It's not on the web so far but I'm anxious to see what the asking price for the 1 beds will be ... This should give us a pretty good idea what to expect for your home, built in 2002. A 20% drop would be devastating.

What can I do? Nothing. Pay back as much and as quickly as we possibly can - at least as long as prices are going down. If they are going down. I'm confused with the statistics, saying prices went down 0.1% for 2,3 months now however, the increase compared to last year is 1.4%. Also, the fact that the average house price in London dropped to "just" ~330k doesn't help me much.

My boss is monitoring 2 houses in Richmond, both came down in the last 2 weeks - but given that the asking price was above 3m (and still is), I couldn't care less that both came down £200k - it doesn't really affect me.

I'm worried now ... I'm scarred when the crash (- 20%, - 40%) is on my door step.

jellybean19_2

the problem i have woith all this housing market crash is no body knows when its going to happen and if it will happen at all.... we lokking to buy soon as were saving for a deposit. how long should we hold on for? any idea's?