Reduce price?

BungalowBel

ReadySteadyPop said:

BungalowBel said:

Exodi said:

BungalowBel said:

And , being a baby-boomer, I don't think the interest rates are high at all    I remember 15%, and for a short while, 17%.  Give me 5% any day!

Give it a rest, houses didn't cost 9x average earnings back then, it's not comparable in the slightest.

I'm sure younger people would happily exchange 5% interest rates for houses that can again be bought by a single earner with an average job.

The remark was intending to be humorous and also to give a bit of perspective on interest rates.  They are not high, compared to the last fifty years.  The price of houses is irrelevant in this context, although I agree that it would be nice to get back to historic price-to-earnings ratio.

Also I have recently sold a very nice modern flat, two bedrooms (one ensuite) on an estate in a decent area in the Midlands for £123.5k. T I think most people could afford that on a modest income. The person buying it is a single parent who works for the NHS - so not a high income.  Not all areas have London/SE prices.

The price or more realistically the amount you borrowed is very relevant if you are coming off a cheap fix, but I agree that these rates are super low compared to the past.

Yes, I agree that the amount you borrowed is relevant in that scenario, but if you borrowed on a 1% fix expecting it to stay that low forever, then you borrowed more than you could afford.

ReadySteadyPop

BungalowBel said:

ReadySteadyPop said:

BungalowBel said:

Exodi said:

BungalowBel said:

And , being a baby-boomer, I don't think the interest rates are high at all    I remember 15%, and for a short while, 17%.  Give me 5% any day!

Give it a rest, houses didn't cost 9x average earnings back then, it's not comparable in the slightest.

I'm sure younger people would happily exchange 5% interest rates for houses that can again be bought by a single earner with an average job.

The remark was intending to be humorous and also to give a bit of perspective on interest rates.  They are not high, compared to the last fifty years.  The price of houses is irrelevant in this context, although I agree that it would be nice to get back to historic price-to-earnings ratio.

Also I have recently sold a very nice modern flat, two bedrooms (one ensuite) on an estate in a decent area in the Midlands for £123.5k. T I think most people could afford that on a modest income. The person buying it is a single parent who works for the NHS - so not a high income.  Not all areas have London/SE prices.

The price or more realistically the amount you borrowed is very relevant if you are coming off a cheap fix, but I agree that these rates are super low compared to the past.

Yes, I agree that the amount you borrowed is relevant in that scenario, but if you borrowed on a 1% fix expecting it to stay that low forever, then you borrowed more than you could afford.

That`s right but large numbers of people seem to have been doing this though?

Albermarle

ReadySteadyPop said:

BungalowBel said:

ReadySteadyPop said:

BungalowBel said:

Exodi said:

BungalowBel said:

And , being a baby-boomer, I don't think the interest rates are high at all    I remember 15%, and for a short while, 17%.  Give me 5% any day!

Give it a rest, houses didn't cost 9x average earnings back then, it's not comparable in the slightest.

I'm sure younger people would happily exchange 5% interest rates for houses that can again be bought by a single earner with an average job.

The remark was intending to be humorous and also to give a bit of perspective on interest rates.  They are not high, compared to the last fifty years.  The price of houses is irrelevant in this context, although I agree that it would be nice to get back to historic price-to-earnings ratio.

Also I have recently sold a very nice modern flat, two bedrooms (one ensuite) on an estate in a decent area in the Midlands for £123.5k. T I think most people could afford that on a modest income. The person buying it is a single parent who works for the NHS - so not a high income.  Not all areas have London/SE prices.

The price or more realistically the amount you borrowed is very relevant if you are coming off a cheap fix, but I agree that these rates are super low compared to the past.

Yes, I agree that the amount you borrowed is relevant in that scenario, but if you borrowed on a 1% fix expecting it to stay that low forever, then you borrowed more than you could afford.

That`s right but large numbers of people seem to have been doing this though?

I thought when affordability checks were done, they were also tested at higher interest rates?
The problem is people have got used to the situation, and in the meantime other spending habits have become established.

ReadySteadyPop

Albermarle said:

ReadySteadyPop said:

BungalowBel said:

ReadySteadyPop said:

BungalowBel said:

Exodi said:

BungalowBel said:

And , being a baby-boomer, I don't think the interest rates are high at all    I remember 15%, and for a short while, 17%.  Give me 5% any day!

Give it a rest, houses didn't cost 9x average earnings back then, it's not comparable in the slightest.

I'm sure younger people would happily exchange 5% interest rates for houses that can again be bought by a single earner with an average job.

The remark was intending to be humorous and also to give a bit of perspective on interest rates.  They are not high, compared to the last fifty years.  The price of houses is irrelevant in this context, although I agree that it would be nice to get back to historic price-to-earnings ratio.

Also I have recently sold a very nice modern flat, two bedrooms (one ensuite) on an estate in a decent area in the Midlands for £123.5k. T I think most people could afford that on a modest income. The person buying it is a single parent who works for the NHS - so not a high income.  Not all areas have London/SE prices.

The price or more realistically the amount you borrowed is very relevant if you are coming off a cheap fix, but I agree that these rates are super low compared to the past.

Yes, I agree that the amount you borrowed is relevant in that scenario, but if you borrowed on a 1% fix expecting it to stay that low forever, then you borrowed more than you could afford.

That`s right but large numbers of people seem to have been doing this though?

I thought when affordability checks were done, they were also tested at higher interest rates?
The problem is people have got used to the situation, and in the meantime other spending habits have become established.

Affordability tests can`t account for future job loss, divorce etc. and I don`t believe they were too stringent anyway, slightly tighter than the total lack of checks that led up to 2008 maybe but not by much, but as you say cheap debt became a lifestyle and many people will now be in trouble.

ReadySteadyPop

jimbog said:

ReadySteadyPop said:

RHemmings said:

ReadySteadyPop said:

https://propertyindustryeye.com/renting-now-cheaper-than-owning-a-first-home-in-nearly-all-uk-regions-halifax/

Both renting and mortgage costs are too high. I'm glad that I am out of both of those. And, I hope that my long term plan to give my son a leg up by going straight to no mortgage for a modest property to start with works out. 

Things are slowly moving in the right direction.

https://thenegotiator.co.uk/down-valuations-rearing-their-head-again-says-big-property-firm/

So say the 'Open Property Group' - a 'we buy any property' company. So, no vested interest there

Seems pretty unlikely that they would be lying about this?

MobileSaver

ReadySteadyPop said:

Albermarle said:

ReadySteadyPop said:

BungalowBel said:

ReadySteadyPop said:

BungalowBel said:

Exodi said:

BungalowBel said:

And , being a baby-boomer, I don't think the interest rates are high at all    I remember 15%, and for a short while, 17%.  Give me 5% any day!

Give it a rest, houses didn't cost 9x average earnings back then, it's not comparable in the slightest.

I'm sure younger people would happily exchange 5% interest rates for houses that can again be bought by a single earner with an average job.

The remark was intending to be humorous and also to give a bit of perspective on interest rates.  They are not high, compared to the last fifty years.  The price of houses is irrelevant in this context, although I agree that it would be nice to get back to historic price-to-earnings ratio.

Also I have recently sold a very nice modern flat, two bedrooms (one ensuite) on an estate in a decent area in the Midlands for £123.5k. T I think most people could afford that on a modest income. The person buying it is a single parent who works for the NHS - so not a high income.  Not all areas have London/SE prices.

The price or more realistically the amount you borrowed is very relevant if you are coming off a cheap fix, but I agree that these rates are super low compared to the past.

Yes, I agree that the amount you borrowed is relevant in that scenario, but if you borrowed on a 1% fix expecting it to stay that low forever, then you borrowed more than you could afford.

That`s right but large numbers of people seem to have been doing this though?

I thought when affordability checks were done, they were also tested at higher interest rates?
The problem is people have got used to the situation, and in the meantime other spending habits have become established.

Affordability tests can`t account for future job loss, divorce etc. and I don`t believe they were too stringent anyway, slightly tighter than the total lack of checks that led up to 2008 maybe but not by much, but as you say cheap debt became a lifestyle and many people will now be in trouble.

Well, of course, affordability tests simply checked that all other things being equal you would still be able to afford the mortgage if rates went much higher after your initial fixed-rate ended. They were never designed as a guarantee against life-changing events and (as much as you love to focus on very unlikely to happen end-of-the-world scenarios to prove your points) the reality is that the number of people who lose their job or divorce during their fixed-rate term is very much in the minority anyway.

Given a choice of defaulting on your mortgage or cutting back on Sky/Netflix/Disney, forgoing Costa coffee, eating in rather than out or taking one less holiday this year, what do you think most people would do?

From memory repossessions have dropped around 90% since the height of the last financial crisis so (even with all the financial upheaval of a global pandemic) it would seem the affordability tests are working exactly as planned.

ReadySteadyPop

MobileSaver said:

ReadySteadyPop said:

Albermarle said:

ReadySteadyPop said:

BungalowBel said:

ReadySteadyPop said:

BungalowBel said:

Exodi said:

BungalowBel said:

And , being a baby-boomer, I don't think the interest rates are high at all    I remember 15%, and for a short while, 17%.  Give me 5% any day!

Give it a rest, houses didn't cost 9x average earnings back then, it's not comparable in the slightest.

I'm sure younger people would happily exchange 5% interest rates for houses that can again be bought by a single earner with an average job.

The remark was intending to be humorous and also to give a bit of perspective on interest rates.  They are not high, compared to the last fifty years.  The price of houses is irrelevant in this context, although I agree that it would be nice to get back to historic price-to-earnings ratio.

Also I have recently sold a very nice modern flat, two bedrooms (one ensuite) on an estate in a decent area in the Midlands for £123.5k. T I think most people could afford that on a modest income. The person buying it is a single parent who works for the NHS - so not a high income.  Not all areas have London/SE prices.

The price or more realistically the amount you borrowed is very relevant if you are coming off a cheap fix, but I agree that these rates are super low compared to the past.

Yes, I agree that the amount you borrowed is relevant in that scenario, but if you borrowed on a 1% fix expecting it to stay that low forever, then you borrowed more than you could afford.

That`s right but large numbers of people seem to have been doing this though?

I thought when affordability checks were done, they were also tested at higher interest rates?
The problem is people have got used to the situation, and in the meantime other spending habits have become established.

Affordability tests can`t account for future job loss, divorce etc. and I don`t believe they were too stringent anyway, slightly tighter than the total lack of checks that led up to 2008 maybe but not by much, but as you say cheap debt became a lifestyle and many people will now be in trouble.

Well, of course, affordability tests simply checked that all other things being equal you would still be able to afford the mortgage if rates went much higher after your initial fixed-rate ended. They were never designed as a guarantee against life-changing events and (as much as you love to focus on very unlikely to happen end-of-the-world scenarios to prove your points) the reality is that the number of people who lose their job or divorce during their fixed-rate term is very much in the minority anyway.

Given a choice of defaulting on your mortgage or cutting back on Sky/Netflix/Disney, forgoing Costa coffee, eating in rather than out or taking one less holiday this year, what do you think most people would do?

From memory repossessions have dropped around 90% since the height of the last financial crisis so (even with all the financial upheaval of a global pandemic) it would seem the affordability tests are working exactly as planned.

 Most people are still on fixes, that is why things are stable at the moment, you might be surprised at how many people could default on unpayable debt.