Are we expecting BOE to remain at 4.75% on 8th February 2025?

Sarngate

weddingringman said:

wheldcj said:

Sorry but that is nonsense.  Unless by fortune of birth you inherit a house or the proceeds of the home you have only one option to own your own property, that is a mortgage. 

I get the addiction to low interest for phones, cars etc but most had/have no option but to take a risk that rates would not increase to these levels so quickly.  

Until a government does two things the future of home ownership for the next generation will be dictated largely by family inheritance.  Meritocracy is out the window.

1) Significantly limit how much profit you can make on homes or at least how much you can pass down untaxed through inheritance i.e massively disincentivise holding onto property until you die is the key.

2) Offer a carrot to the older empty nester generation to downsize their family sized properties, by schools and other amenities.  Therefore properly utilising our housing stock & by increasing supply reducing house prices.

My kids have absolutely no chance regardless of their eventual job an income of buying property like previous generations which is hugely depressing as a developed nation.

I disagree on the basis that over the last 4 or 5 years more and more people have began borrowing 5 or 6x incomes, and at rates that everyone knew were artificially low.

I heard on the radio that the average first time buyer borrows 250k. That’s reckless and totally unnecessary. What happened to working your way up the ladder?! There are places less than half that price, within a short drive or commute to probably 95% of jobs in the UK. It’s nonsensical for a first time buyer to be buying at enough the average house price for the UK. 

People just don’t seem to want to buy a modest place and spend a few years building equity. My first flat was well under 100k, and you can pretty much buy it for that same price all these years later. No one seems interested in them for some reason, but the extortionate 350-400k new builds were selling like hot cakes last year… strange huh…

Completely untrue.

My office is in Surrey, near Weybridge. The very cheapest three bed flats (bedroom, nursery, spare room/office as WFH) within 5 miles are £280k, most well over £320k.

To suggest 95% of jobs in the UK are located within a short drive of affordable homes is crackers.

£100k flats are the preserve of a very small percentage of the population.

MattMattMattUK

weddingringman said:

wheldcj said:

Sorry but that is nonsense.  Unless by fortune of birth you inherit a house or the proceeds of the home you have only one option to own your own property, that is a mortgage. 

I get the addiction to low interest for phones, cars etc but most had/have no option but to take a risk that rates would not increase to these levels so quickly.  

Until a government does two things the future of home ownership for the next generation will be dictated largely by family inheritance.  Meritocracy is out the window.

1) Significantly limit how much profit you can make on homes or at least how much you can pass down untaxed through inheritance i.e massively disincentivise holding onto property until you die is the key.

2) Offer a carrot to the older empty nester generation to downsize their family sized properties, by schools and other amenities.  Therefore properly utilising our housing stock & by increasing supply reducing house prices.

My kids have absolutely no chance regardless of their eventual job an income of buying property like previous generations which is hugely depressing as a developed nation.

I disagree on the basis that over the last 4 or 5 years more and more people have began borrowing 5 or 6x incomes, and at rates that everyone knew were artificially low.

They were not artificially low, they were not artificially high, they were not artificially anything, they just were. The fact that they do not align with historical rates is largely irrelevant and does not mean that it is a correction for them to rise back to 4-6%, to think so shows a huge lack of understanding in the markets and supply and demand.

weddingringman said:

I heard on the radio that the average first time buyer borrows 250k. That’s reckless and totally unnecessary. What happened to working your way up the ladder?! There are places less than half that price, within a short drive or commute to probably 95% of jobs in the UK. It’s nonsensical for a first time buyer to be buying at enough the average house price for the UK. 

People hear lots of things on the radio, but as ever the devil is in the detail. The average is £239k, but that does not factor in income or location in the country, the amount borrowed in London and the SE is 2-5 times that of the north and midlands, however the average wage in London and the South East is also significantly higher than the national average. On average borrowing for first time buyers was 4.3 income, regardless of region. Average house price is also meaningless when looking at individuals, the average house price where I live would mean one was slightly short of the cost of a one bedroom flat, in London it would buy one a garage. 

https://www.statista.com/statistics/792294/first-time-buyer-average-mortgage-by-region-uk/

weddingringman said:

People just don’t seem to want to buy a modest place and spend a few years building equity. My first flat was well under 100k, and you can pretty much buy it for that same price all these years later. No one seems interested in them for some reason, but the extortionate 350-400k new builds were selling like hot cakes last year… strange huh…

If I could have bought a flat for £100k I could have bought two without needing a mortgage, so historical comparisons are irrelevant. £200-240k around here will get buy a one bed, or a small two bed (around the same size in square meters), the average age of a first time buyer in Q4 2022 was 37, many now need more space for growing family so tend to buy bigger later, whilst having rented smaller properties pre-children or when they were small and so space was less essential. There will of course be those who overstretch themselves to get something that they want rather than need, but that has always been the case, the biggest example of that was in the 90s with crippling mortgages, or the mid 2000s where 105-110% mortgages happened. 

weddingringman

MattMattMattUK said:

weddingringman said:

wheldcj said:

Sorry but that is nonsense.  Unless by fortune of birth you inherit a house or the proceeds of the home you have only one option to own your own property, that is a mortgage. 

I get the addiction to low interest for phones, cars etc but most had/have no option but to take a risk that rates would not increase to these levels so quickly.  

Until a government does two things the future of home ownership for the next generation will be dictated largely by family inheritance.  Meritocracy is out the window.

1) Significantly limit how much profit you can make on homes or at least how much you can pass down untaxed through inheritance i.e massively disincentivise holding onto property until you die is the key.

2) Offer a carrot to the older empty nester generation to downsize their family sized properties, by schools and other amenities.  Therefore properly utilising our housing stock & by increasing supply reducing house prices.

My kids have absolutely no chance regardless of their eventual job an income of buying property like previous generations which is hugely depressing as a developed nation.

I disagree on the basis that over the last 4 or 5 years more and more people have began borrowing 5 or 6x incomes, and at rates that everyone knew were artificially low.

They were not artificially low, they were not artificially high, they were not artificially anything, they just were. The fact that they do not align with historical rates is largely irrelevant and does not mean that it is a correction for them to rise back to 4-6%, to think so shows a huge lack of understanding in the markets and supply and demand.

weddingringman said:

I heard on the radio that the average first time buyer borrows 250k. That’s reckless and totally unnecessary. What happened to working your way up the ladder?! There are places less than half that price, within a short drive or commute to probably 95% of jobs in the UK. It’s nonsensical for a first time buyer to be buying at enough the average house price for the UK. 

People hear lots of things on the radio, but as ever the devil is in the detail. The average is £239k, but that does not factor in income or location in the country, the amount borrowed in London and the SE is 2-5 times that of the north and midlands, however the average wage in London and the South East is also significantly higher than the national average. On average borrowing for first time buyers was 4.3% of income, regardless of region. Average house price is also meaningless when looking at individuals, the average house price where I live would mean one was slightly short of the cost of a one bedroom flat, in London it would buy one a garage. 

https://www.statista.com/statistics/792294/first-time-buyer-average-mortgage-by-region-uk/

weddingringman said:

People just don’t seem to want to buy a modest place and spend a few years building equity. My first flat was well under 100k, and you can pretty much buy it for that same price all these years later. No one seems interested in them for some reason, but the extortionate 350-400k new builds were selling like hot cakes last year… strange huh…

If I could have bought a flat for £100k I could have bought two without needing a mortgage, so historical comparisons are irrelevant. £200-240k around here will get buy a one bed, or a small two bed (around the same size in square meters), the average age of a first time buyer in Q4 2022 was 37, many now need more space for growing family so tend to buy bigger later, whilst having rented smaller properties pre-children or when they were small and so space was less essential. There will of course be those who overstretch themselves to get something that they want rather than need, but that has always been the place, the biggest example of that was in the 90s with crippling mortgages, or the mid 2000s where 105-110% mortgages happened. 

Did you notice notice the glaringly obviously correlation between falling mortgage rates and the slashing of the base rate to 0.1% at the beginning of the pandemic?! Was that lost on you? 

What on earth was that if it wasn’t artificially low rates in the face of a health crisis that would cost us billions?!

weddingringman

Sarngate said:

weddingringman said:

wheldcj said:

Sorry but that is nonsense.  Unless by fortune of birth you inherit a house or the proceeds of the home you have only one option to own your own property, that is a mortgage. 

I get the addiction to low interest for phones, cars etc but most had/have no option but to take a risk that rates would not increase to these levels so quickly.  

Until a government does two things the future of home ownership for the next generation will be dictated largely by family inheritance.  Meritocracy is out the window.

1) Significantly limit how much profit you can make on homes or at least how much you can pass down untaxed through inheritance i.e massively disincentivise holding onto property until you die is the key.

2) Offer a carrot to the older empty nester generation to downsize their family sized properties, by schools and other amenities.  Therefore properly utilising our housing stock & by increasing supply reducing house prices.

My kids have absolutely no chance regardless of their eventual job an income of buying property like previous generations which is hugely depressing as a developed nation.

I disagree on the basis that over the last 4 or 5 years more and more people have began borrowing 5 or 6x incomes, and at rates that everyone knew were artificially low.

I heard on the radio that the average first time buyer borrows 250k. That’s reckless and totally unnecessary. What happened to working your way up the ladder?! There are places less than half that price, within a short drive or commute to probably 95% of jobs in the UK. It’s nonsensical for a first time buyer to be buying at enough the average house price for the UK. 

People just don’t seem to want to buy a modest place and spend a few years building equity. My first flat was well under 100k, and you can pretty much buy it for that same price all these years later. No one seems interested in them for some reason, but the extortionate 350-400k new builds were selling like hot cakes last year… strange huh…

Completely untrue.

My office is in Surrey, near Weybridge. The very cheapest three bed flats (bedroom, nursery, spare room/office as WFH) within 5 miles are £280k, most well over £320k.

To suggest 95% of jobs in the UK are located within a short drive of affordable homes is crackers.

£100k flats are the preserve of a very small percentage of the population.

It’s not complete untrue, perhaps not 95% but easily 80%. Your perception of the housing market is grossly skewed by the affluent areas of England - not the UK as a whole. 

Look at a heat map of average prices for the UK, and asides from London and areas in the very south you have ‘average’ prices of 250 - 300k. Entry level properties in these areas are half that price. Average prices in Scotland for example are 186k!!!

Some people should’ve realised years ago that they simply can’t afford to live and work in London. I just don’t get why they’d stay. 

MattMattMattUK

weddingringman said:

MattMattMattUK said:

weddingringman said:

wheldcj said:

Sorry but that is nonsense.  Unless by fortune of birth you inherit a house or the proceeds of the home you have only one option to own your own property, that is a mortgage. 

I get the addiction to low interest for phones, cars etc but most had/have no option but to take a risk that rates would not increase to these levels so quickly.  

Until a government does two things the future of home ownership for the next generation will be dictated largely by family inheritance.  Meritocracy is out the window.

1) Significantly limit how much profit you can make on homes or at least how much you can pass down untaxed through inheritance i.e massively disincentivise holding onto property until you die is the key.

2) Offer a carrot to the older empty nester generation to downsize their family sized properties, by schools and other amenities.  Therefore properly utilising our housing stock & by increasing supply reducing house prices.

My kids have absolutely no chance regardless of their eventual job an income of buying property like previous generations which is hugely depressing as a developed nation.

I disagree on the basis that over the last 4 or 5 years more and more people have began borrowing 5 or 6x incomes, and at rates that everyone knew were artificially low.

They were not artificially low, they were not artificially high, they were not artificially anything, they just were. The fact that they do not align with historical rates is largely irrelevant and does not mean that it is a correction for them to rise back to 4-6%, to think so shows a huge lack of understanding in the markets and supply and demand.

weddingringman said:

I heard on the radio that the average first time buyer borrows 250k. That’s reckless and totally unnecessary. What happened to working your way up the ladder?! There are places less than half that price, within a short drive or commute to probably 95% of jobs in the UK. It’s nonsensical for a first time buyer to be buying at enough the average house price for the UK. 

People hear lots of things on the radio, but as ever the devil is in the detail. The average is £239k, but that does not factor in income or location in the country, the amount borrowed in London and the SE is 2-5 times that of the north and midlands, however the average wage in London and the South East is also significantly higher than the national average. On average borrowing for first time buyers was 4.3% of income, regardless of region. Average house price is also meaningless when looking at individuals, the average house price where I live would mean one was slightly short of the cost of a one bedroom flat, in London it would buy one a garage. 

https://www.statista.com/statistics/792294/first-time-buyer-average-mortgage-by-region-uk/

weddingringman said:

People just don’t seem to want to buy a modest place and spend a few years building equity. My first flat was well under 100k, and you can pretty much buy it for that same price all these years later. No one seems interested in them for some reason, but the extortionate 350-400k new builds were selling like hot cakes last year… strange huh…

If I could have bought a flat for £100k I could have bought two without needing a mortgage, so historical comparisons are irrelevant. £200-240k around here will get buy a one bed, or a small two bed (around the same size in square meters), the average age of a first time buyer in Q4 2022 was 37, many now need more space for growing family so tend to buy bigger later, whilst having rented smaller properties pre-children or when they were small and so space was less essential. There will of course be those who overstretch themselves to get something that they want rather than need, but that has always been the place, the biggest example of that was in the 90s with crippling mortgages, or the mid 2000s where 105-110% mortgages happened. 

Did you notice notice the glaringly obviously correlation between falling mortgage rates and the slashing of the base rate to 0.1% at the beginning of the pandemic?! Was that lost on you? 

That is how mortgage rates generally work, they are linked to base rate, it is not lost on me, it is a fact, but you are not making a point, just mentioning a causative relationship of which we are all aware. 

weddingringman said:

What on earth was that if it wasn’t artificially low rates in the face of a health crisis that would cost us billions?!

It was a reduction in interest rates to support the economy and the housing market, it was not "artificially" anything.

BikingBud

MattMattMattUK said:

weddingringman said:

wheldcj said:

Sorry but that is nonsense.  Unless by fortune of birth you inherit a house or the proceeds of the home you have only one option to own your own property, that is a mortgage. 

I get the addiction to low interest for phones, cars etc but most had/have no option but to take a risk that rates would not increase to these levels so quickly.  

Until a government does two things the future of home ownership for the next generation will be dictated largely by family inheritance.  Meritocracy is out the window.

1) Significantly limit how much profit you can make on homes or at least how much you can pass down untaxed through inheritance i.e massively disincentivise holding onto property until you die is the key.

2) Offer a carrot to the older empty nester generation to downsize their family sized properties, by schools and other amenities.  Therefore properly utilising our housing stock & by increasing supply reducing house prices.

My kids have absolutely no chance regardless of their eventual job an income of buying property like previous generations which is hugely depressing as a developed nation.

I disagree on the basis that over the last 4 or 5 years more and more people have began borrowing 5 or 6x incomes, and at rates that everyone knew were artificially low.

They were not artificially low, they were not artificially high, they were not artificially anything, they just were. The fact that they do not align with historical rates is largely irrelevant and does not mean that it is a correction for them to rise back to 4-6%, to think so shows a huge lack of understanding in the markets and supply and demand.

weddingringman said:

I heard on the radio that the average first time buyer borrows 250k. That’s reckless and totally unnecessary. What happened to working your way up the ladder?! There are places less than half that price, within a short drive or commute to probably 95% of jobs in the UK. It’s nonsensical for a first time buyer to be buying at enough the average house price for the UK. 

People hear lots of things on the radio, but as ever the devil is in the detail. The average is £239k, but that does not factor in income or location in the country, the amount borrowed in London and the SE is 2-5 times that of the north and midlands, however the average wage in London and the South East is also significantly higher than the national average. On average borrowing for first time buyers was 4.3% of income, regardless of region. Average house price is also meaningless when looking at individuals, the average house price where I live would mean one was slightly short of the cost of a one bedroom flat, in London it would buy one a garage. 

https://www.statista.com/statistics/792294/first-time-buyer-average-mortgage-by-region-uk/

weddingringman said:

People just don’t seem to want to buy a modest place and spend a few years building equity. My first flat was well under 100k, and you can pretty much buy it for that same price all these years later. No one seems interested in them for some reason, but the extortionate 350-400k new builds were selling like hot cakes last year… strange huh…

If I could have bought a flat for £100k I could have bought two without needing a mortgage, so historical comparisons are irrelevant. £200-240k around here will get buy a one bed, or a small two bed (around the same size in square meters), the average age of a first time buyer in Q4 2022 was 37, many now need more space for growing family so tend to buy bigger later, whilst having rented smaller properties pre-children or when they were small and so space was less essential. There will of course be those who overstretch themselves to get something that they want rather than need, but that has always been the place, the biggest example of that was in the 90s with crippling mortgages, or the mid 2000s where 105-110% mortgages happened. 

Please confirm the bit in bold. 4.3%? Really? I, probably like most, cannot get to the article behind the paywall!

Maybe 4.3 x income but as you will appreciate those are wholly different figures.

Nevertheless, you paint the picture that it is only by choice that people live in rental and suddenly, around 37 ish, find they are in a relationship and want stability in their own house. But what price is that >650/700k? Clearly not what we would expect as first time buyer territory.

Space for a growing family has always been an issue but holding off until they can no longer cope where they are, rented 2 bed, and with the likelihood of progression to 2 better, mid-career, wages and potentially receiving the large inheritance all contribute to a greater pot size and therefore the willingness (eagerness) to pay more than others may be able. 

Alongside low interest rates enabling easy and excessive access to cheap money, these pots of cash have driven house prices up and because they "always go up, don't they?" there continues to be a widespread belief that borrowing excessively (beyond your evidential means) for housing is not only acceptable but you are stupid if you don't.

Problem is like most things sheeple do not do their own research or understand their own exposure and risk. And when someone comes along and changes the context, albeit too little and much too late, there is nowhere to go.

MattMattMattUK

BikingBud said:

MattMattMattUK said:

weddingringman said:

wheldcj said:

Sorry but that is nonsense.  Unless by fortune of birth you inherit a house or the proceeds of the home you have only one option to own your own property, that is a mortgage. 

I get the addiction to low interest for phones, cars etc but most had/have no option but to take a risk that rates would not increase to these levels so quickly.  

Until a government does two things the future of home ownership for the next generation will be dictated largely by family inheritance.  Meritocracy is out the window.

1) Significantly limit how much profit you can make on homes or at least how much you can pass down untaxed through inheritance i.e massively disincentivise holding onto property until you die is the key.

2) Offer a carrot to the older empty nester generation to downsize their family sized properties, by schools and other amenities.  Therefore properly utilising our housing stock & by increasing supply reducing house prices.

My kids have absolutely no chance regardless of their eventual job an income of buying property like previous generations which is hugely depressing as a developed nation.

I disagree on the basis that over the last 4 or 5 years more and more people have began borrowing 5 or 6x incomes, and at rates that everyone knew were artificially low.

They were not artificially low, they were not artificially high, they were not artificially anything, they just were. The fact that they do not align with historical rates is largely irrelevant and does not mean that it is a correction for them to rise back to 4-6%, to think so shows a huge lack of understanding in the markets and supply and demand.

weddingringman said:

I heard on the radio that the average first time buyer borrows 250k. That’s reckless and totally unnecessary. What happened to working your way up the ladder?! There are places less than half that price, within a short drive or commute to probably 95% of jobs in the UK. It’s nonsensical for a first time buyer to be buying at enough the average house price for the UK. 

People hear lots of things on the radio, but as ever the devil is in the detail. The average is £239k, but that does not factor in income or location in the country, the amount borrowed in London and the SE is 2-5 times that of the north and midlands, however the average wage in London and the South East is also significantly higher than the national average. On average borrowing for first time buyers was 4.3% of income, regardless of region. Average house price is also meaningless when looking at individuals, the average house price where I live would mean one was slightly short of the cost of a one bedroom flat, in London it would buy one a garage. 

https://www.statista.com/statistics/792294/first-time-buyer-average-mortgage-by-region-uk/

weddingringman said:

People just don’t seem to want to buy a modest place and spend a few years building equity. My first flat was well under 100k, and you can pretty much buy it for that same price all these years later. No one seems interested in them for some reason, but the extortionate 350-400k new builds were selling like hot cakes last year… strange huh…

If I could have bought a flat for £100k I could have bought two without needing a mortgage, so historical comparisons are irrelevant. £200-240k around here will get buy a one bed, or a small two bed (around the same size in square meters), the average age of a first time buyer in Q4 2022 was 37, many now need more space for growing family so tend to buy bigger later, whilst having rented smaller properties pre-children or when they were small and so space was less essential. There will of course be those who overstretch themselves to get something that they want rather than need, but that has always been the place, the biggest example of that was in the 90s with crippling mortgages, or the mid 2000s where 105-110% mortgages happened. 

Please confirm the bit in bold. 4.3%? Really? I, probably like most, cannot get to the article behind the paywall!

Maybe 4.3 x income but as you will appreciate those are wholly different figures.

I had corrected the 4.3%/4.3 of income before you posted, but there seems to be some crossover.

BikingBud said:

Nevertheless, you paint the picture that it is only by choice that people live in rental and suddenly, around 37 ish, find they are in a relationship and want stability in their own house. But what price is that >650/700k? Clearly not what we would expect as first time buyer territory.

A lot of people do, especially in London and the South East, they live more centrally during the early part of their career, they increase their earnings and seniority and at the point when their children reach school age they move out of central London to the suburbs or Home Counties, their £2k+ rent for a flat in London equates to a mortgage on a house within commuting distance. If you are not in a professional or high earning role in London, or you do not get parental assistance, it is highly unlikely one would be able to buy anyway. As they are also partnered up it means that they can join forces, combined deposits, combined income, it means that they can leapfrog a section of the housing market, one which is in many parts of the country almost entirely owned by the rental market. 

BikingBud said:

Space for a growing family has always been an issue but holding off until they can no longer cope where they are, rented 2 bed, and with the likelihood of progression to 2 better, mid-career, wages and potentially receiving the large inheritance all contribute to a greater pot size and therefore the willingness (eagerness) to pay more than others may be able. 

I agree. It makes little sense to buy a one or two bed flat when one makes the reasonable assessment that the option is to potentially rent for another 2-3 years, the buy a house. Once moving costs are factored in one would likely make a loss on the flat purchase. Couple up with someone in a similar job role, it becomes a scenario where a couple can have £300k as a deposit and a combined income into six figures. Whilst people will say that does not align with the average income, the average regional income is far higher in parts of the country than others, but so comparatively is the cost of housing. National average income is not relevant where I live because income in the area is considerably higher, but so are property prices, national comparisons do not really work, London and the South East distort the figures considerably. 

BikingBud said:

Alongside low interest rates enabling easy and excessive access to cheap money, these pots of cash have driven house prices up and because they "always go up, don't they?" there continues to be a widespread belief that borrowing excessively (beyond your evidential means) for housing is not only acceptable but you are stupid if you don't.

Housing is largely driven up by supply and demand, demand, especially in London, the South East, South West and East of England region, as well as in cities throughout the country (Manchester, Leeds and Birmingham being particularly impacted) is vastly higher than supply. If people cannot afford to buy on using mortgages there are cash buyers, investors, international buyers etc. willing to buy and rent the property out. Increasing interest rates might create a temporary dip in prices, but as 2007/2008 demonstrated supply and demand imbalance is far more important to pricing. 

BikingBud said:

Problem is like most things sheeple do not do their own research or understand their own exposure and risk. And when someone comes along and changes the context, albeit too little and much too late, there is nowhere to go.

The fact that you refer to "sheeple" says enough. 

Sarah1Mitty2

ItisHappening said:

Sarah1Mitty2 said:

[Deleted User] said:

They say 5.5% by the end of the year on the news. I thought 6% was the maximum stress testing. Getting a bit risky. Lots of people are going to be in trouble if rates remain this high.

I don`t believe "stress testing" has much value, it just assumes that the financial situation of the person trying to take out a mortgage debt will stay the same or get better way into the future, the best way to "stress test" is just to limit lending, I suppose rising interest rates are doing that anyway? I could easily see base rate at 6% in the near future though.

Base rate may end up at 8% next year as inflation is proving to be very sticky. Looks like a recession is on the horizon, it certainly feels like we are already in one.

Some mumblings now of U.S rates going to 6%.

Sarah1Mitty2

Beetroot_24 said:

weddingringman said:

IAMIAM said:

So BOE rates are predicted to be 5.5% and some by year end/early 2024. 
Whether you rent or have a mortgage you are screwed. They both are on a parr at the moment.

That’s only 1 or 2% above what a lot of people will have been paying on average over the last 10-15 years. 

But on how much? 

I was paying 5/6% 13 years ago, then 4% for a few years (stupidly). However, I only had to borrow £97k on a purchase price of £111k. The house in front of mine, (same size as mine was but without a garage, but similar condition), has just sold for £300k. Two flipped houses sold for £325k in the last couple of years. 

My payment was around £565 a month. A 2% rise would have seen me paying £688.

If I had to buy the same house today, based on £300k, with the same deposit and the same rate as I had when I bought, it would cost me c£1650. (A 2% rise takes that to £2036 for comparison).

The people who will be most affected by the rate increases aren't likely to be the ones who have been paying lower rates for the last 10-15 years.

The people mainly affected will be the people trying to sell those houses for 300k.

Sarah1Mitty2

MattMattMattUK said:

weddingringman said:

wheldcj said:

Sorry but that is nonsense.  Unless by fortune of birth you inherit a house or the proceeds of the home you have only one option to own your own property, that is a mortgage. 

I get the addiction to low interest for phones, cars etc but most had/have no option but to take a risk that rates would not increase to these levels so quickly.  

Until a government does two things the future of home ownership for the next generation will be dictated largely by family inheritance.  Meritocracy is out the window.

1) Significantly limit how much profit you can make on homes or at least how much you can pass down untaxed through inheritance i.e massively disincentivise holding onto property until you die is the key.

2) Offer a carrot to the older empty nester generation to downsize their family sized properties, by schools and other amenities.  Therefore properly utilising our housing stock & by increasing supply reducing house prices.

My kids have absolutely no chance regardless of their eventual job an income of buying property like previous generations which is hugely depressing as a developed nation.

I disagree on the basis that over the last 4 or 5 years more and more people have began borrowing 5 or 6x incomes, and at rates that everyone knew were artificially low.

They were not artificially low, they were not artificially high, they were not artificially anything, they just were. The fact that they do not align with historical rates is largely irrelevant and does not mean that it is a correction for them to rise back to 4-6%, to think so shows a huge lack of understanding in the markets and supply and demand.

weddingringman said:

I heard on the radio that the average first time buyer borrows 250k. That’s reckless and totally unnecessary. What happened to working your way up the ladder?! There are places less than half that price, within a short drive or commute to probably 95% of jobs in the UK. It’s nonsensical for a first time buyer to be buying at enough the average house price for the UK. 

People hear lots of things on the radio, but as ever the devil is in the detail. The average is £239k, but that does not factor in income or location in the country, the amount borrowed in London and the SE is 2-5 times that of the north and midlands, however the average wage in London and the South East is also significantly higher than the national average. On average borrowing for first time buyers was 4.3 income, regardless of region. Average house price is also meaningless when looking at individuals, the average house price where I live would mean one was slightly short of the cost of a one bedroom flat, in London it would buy one a garage. 

https://www.statista.com/statistics/792294/first-time-buyer-average-mortgage-by-region-uk/

weddingringman said:

People just don’t seem to want to buy a modest place and spend a few years building equity. My first flat was well under 100k, and you can pretty much buy it for that same price all these years later. No one seems interested in them for some reason, but the extortionate 350-400k new builds were selling like hot cakes last year… strange huh…

If I could have bought a flat for £100k I could have bought two without needing a mortgage, so historical comparisons are irrelevant. £200-240k around here will get buy a one bed, or a small two bed (around the same size in square meters), the average age of a first time buyer in Q4 2022 was 37, many now need more space for growing family so tend to buy bigger later, whilst having rented smaller properties pre-children or when they were small and so space was less essential. There will of course be those who overstretch themselves to get something that they want rather than need, but that has always been the case, the biggest example of that was in the 90s with crippling mortgages, or the mid 2000s where 105-110% mortgages happened. 

This is incorrect, they were manipulated lower with QE.