Cost of living squeeze in 2022, 23 & 24 (Vol. 2)

[okgo]

djc206 said:

Might turn out to be a good time to sell anyway, market isn’t looking great in many places right now.

What gives you that impression out of interest?

I’m seeing stuff go under offer fairly quickly if it’s half decent (in similar area to Croyde house - wealthy areas of SW/SE London).

[croyde]

okgo said:

But it was worth 7 figures from what he has repeatedly said, so he’s made out like a bandit in that case, not sure I’d be moaning personally

I am moaning as it's only worth 6 figures and the ex gets to keep all the money because I've been sensible and have a meagre pension and savings.

Anyway, fingers crossed it goes through and my journey to sanity continues.

Back on topic, I agree, most people with mortgages were lucky enough not to be too badly affected.

[Thankyou4calling]

Croyde I'm not looking to pry into your business - but I will

Why does your ex get all the money from your house sale?

Are you protecting your interests and not being impulsive (which I've done)

[Earthdweller]

Downward said:

raceboy said:

Just been costing out the business model...
Ratty old van £2000
20-25 individual dog cages £400
Roof vent £30
sound proofing £70
So £2500 all in, what's the average cost for a day at doggy day care? About £25 a dog/day? I'm in profit before the end of week one!

You could even then use the van for Deliveroo/UberEats while full of the furry passengers during the day, I really should be pitching this on Dragons Den as a franchise rather than sharing it on here.

Only drawback I can see is there appears to be some sort of legal licencing requirements....but I'd imagine it would take months if not years to be investigated.

Dumb and Dumber

A mate of mine retired from the Police and set up a dog walking business in North London, initially with one van and just him and his wife involved back around 2011/12

Ended up with a fleet of 6 vans and an annual turnover of around £1/2m

Covid kicked the ass out of it unfortunately and a couple of years after that he decided to sell on the business which was now much reduced and enjoy retirement properly

[Fusion777]

okgo said:

But nothing so far has really happened has it? No talk of repossessions (it’s been now over 2 years since higher rates started happening - I know as I just beat it to get a cheap 5 year), no giant recession?

As someone up the page said, it’s 30 odd percent of houses, owned by the most sensible of the public, because they’ve got a mortgage in the first place. Storm in a teacup.

Croyde your interest only mortgage is not a common situation. I’d imagine you still made a fortune off the house despite paying back very little of its value?

I wouldn't be so sure. Whitbread cut 1,500 jobs recently as they're closing lots of restaurants and converting them to rooms. This sort of thing has a delayed effect, especially when lots are still on old fixed terms at super low rates that haven't expired yet.

Economic growth has flatlined for a while now, unemployment is up (albeit from a low base) and rates aren't showing signs of coming down yet.

Don't forget mortgage rates often affect renters too, as landlords pass on the increased costs.

[djc206]

okgo said:

djc206 said:

Might turn out to be a good time to sell anyway, market isn’t looking great in many places right now.

What gives you that impression out of interest?

I’m seeing stuff go under offer fairly quickly if it’s half decent (in similar area to Croyde house - wealthy areas of SW/SE London).

It’s been in the news that prices have fallen slightly nationally again.

4% drop since Sept 22 Add in the effect of inflation and it’s not a great picture.

London specific link

[G-wiz]

Bugger: https://www.bbc.co.uk/news/articles/c4n1yjll87wo

Hundreds of thousands of homeowners have taken out mortgages in the last three years that they will still be paying off into retirement

[okgo]

G-wiz said:

Bugger: https://www.bbc.co.uk/news/articles/c4n1yjll87wo

Hundreds of thousands of homeowners have taken out mortgages in the last three years that they will still be paying off into retirement

Projecting with yet another post? Dull.

[raceboy]

G-wiz said:

Bugger: https://www.bbc.co.uk/news/articles/c4n1yjll87wo

Hundreds of thousands of homeowners have taken out mortgages in the last three years that they will still be paying off into retirement

Only they will not actually be 'retired' will they, just old, and worn out as they will still be working well into their 70's, unlucky buggers.

[Hustle_]

Borrowing is dangerous in the wrong hands.

I've just taken out a 35 year mortgage. Will I still be paying it in 2059? Will I fk!

[snuffy]

I'm surprised a bank will let people take out a mortgage term that will take them past state retirement age.

[raceboy]

snuffy said:

I'm surprised a bank will let people take out a mortgage term that will take them past state retirement age.

They probably know something about what the state retirement age will be then.

[leef44]

snuffy said:

I'm surprised a bank will let people take out a mortgage term that will take them past state retirement age.

When I took out my last mortgage which would have taken me over retirement age, had I not paid it off early, the mortgage company needed me to substantiate my work pension details so that they could see that I had the means to continue paying after retiring.

[m3jappa]

Mortgage into retirement age a good idea?

Maybe not, but still better than having to pay rent when your retirement age for someone else asset.

And an awful lot can change in 35 years. For better or for worse.

[JagLover]

m3jappa said:

Mortgage into retirement age a good idea?

Maybe not, but still better than having to pay rent when your retirement age for someone else asset.

And an awful lot can change in 35 years. For better or for worse.

There is also often the option to downsize in later life.

So family home, on a long term mortgage, and maybe downsize to something smaller at 70ish.

[Ian Geary]

G-wiz said:

Bugger: https://www.bbc.co.uk/news/articles/c4n1yjll87wo

Hundreds of thousands of homeowners have taken out mortgages in the last three years that they will still be paying off into retirement

I did this 12 years ago - took on a mortgage until I was 69 I think. The first 2 years of £2k a month with the wife on maternity leave definitely put me into "housing poverty".

Still, we got a 4 bed detached with a big garden rather than an average 3 bed semi as our second house, and I (correctly) guessed my earnings and inflation would increase to make £2k pm seem smaller in time.

As it was, after the 2 year fixed period we got a lower rate dropping it to £1200 a month - less than the people over the road were paying in rent for their 3 bed semi...

Ultimately I am now overpaying it heavily to get rid of it by the time I'm 60 and fixed it at under 2% for 10 years.

Unless your fortunate to inherit wealth or be part of the 1% debt is just something you have to do to get property.

Debt in itself isn't a problem imo - it's debt you can't afford to service that's the problem.

Though house price Vs wages remains ridiculous and I don't see it ever coming back. When we pay off our mortgage we will probably immediately start saving for our kids' houses.

[soupdragon1]

With these mortgages being approved into retirement age, I guess the banks are really carrying to much risk as I would imagine in most cases, the majority of the debt will be paid by the time they stop working and if the st hits the fan, the bank still hold the title deeds and the house has plenty of equity. So banks will be like yeah, I'm alright jack, fill your boots.

Maybe not so much for someone in their 50s, earning a large wage and taking out a large low equity mortgage. Ill health becomes a risk.

[Hustle_]

If you're under 35 or so, all you have known during your adult life has been constant and significant runaway house price rises. The people you know to have done well are the people who have used all the leverage available to them and bought the biggest / most houses they can

It's no small wonder that property prices now have such inertia.

[Digga]

Hustle_ said:

If you're under 35 or so, all you have known during your adult life has been constant and significant runaway house price rises. The people you know to have done well are the people who have used all the leverage available to them and bought the biggest / most houses they can

It's no small wonder that property prices now have such inertia.

Property prices have intertia because every thinktank and political party agree we should be building at least 300k new homes per year but almost never do.

Peak building was in 1970's and the last time public and private building was equal - 175k each - was in 1978.

There is a whole host of information out there about why the supply chain is so fked - carteles, planning, total lack of government support etc. - but the net resilt is what we see. Values are out of hand.

Here is just one piece: https://www.cityam.com/regulator-finds-fundamental...

[kingston12]

Digga said:

Hustle_ said:

If you're under 35 or so, all you have known during your adult life has been constant and significant runaway house price rises. The people you know to have done well are the people who have used all the leverage available to them and bought the biggest / most houses they can

It's no small wonder that property prices now have such inertia.

Property prices have intertia because every thinktank and political party agree we should be building at least 300k new homes per year but almost never do.

Peak building was in 1970's and the last time public and private building was equal - 175k each - was in 1978.

There is a whole host of information out there about why the supply chain is so fked - carteles, planning, total lack of government support etc. - but the net resilt is what we see. Values are out of hand.

Here is just one piece: https://www.cityam.com/regulator-finds-fundamental...

That's definitely the key reason behind it, but as Hustle says, lack of supply definitely been compounded by a whole generation now having only seeing huge house prices rises.

The Government's response to shortage of housing supply is often inflationary (Help to Buy etc.) and banks are prepared to offer ever increasing mortgage sums over longer periods, but it still takes people to be prepared to take on the extra debt for prices to carry on spiralling at the level they have done.