Interest rates going up soon...
Discussion
jdw1234 said:
I guess its a political issue rather than a rights issue.
I.e. as the younger non-property owning demographic rises, it will become higher up the political agenda. You can see it happening now.
Interesting stuff.
That's true, but I think expectations are being adjusted, and parents and family 'wealth' is being transferred to help out the generation below, a process being pushed even harder by various economic drivers also. I.e. as the younger non-property owning demographic rises, it will become higher up the political agenda. You can see it happening now.
Interesting stuff.
Sadly this is very much a middle class thing, and the gap between the haves and the have nots is widening again, but rather than this being a temporary move, I think we are returning to the normal from what has been a two generation or so temporary paradigm. Im not saying I agree with it, its just the way I see it.
You are right though, 'we' could vote with out feet, but I doubt people will, I don't know, but I would guess the voting demographic is very much at odds with the type of people we are talking about, until that changes, nothing will, and even then you are left with a massive economic problem.
scenario8 said:
Just how accurate is that assumption that controlling credit will control house prices? What proportion of properties are bought with a large mortgage LTV/easily managed mortgage/any mortgage/no mortgage? How much has foreign money driven prices (within the M25 (which I would suggest is behind much of the Average UK House Price Soar headlines in the media))? In my view, large rate rises will disproportionately hit those that were just unfortunate not to have reached that stage in life until recently where property purchases were possible. They "had to" pay a fortune for their house and now the repayments will increase. I can't see how it will particularly help those younger/poorer than them to get onto the ladder as afordability will take a dive.
It's all a bit of a mess, really.
The more important part of this is that the larger the deposit requirement the fewer new buyers at the bottom of the market and the increase in the cash rich existing owners buying more. Thus, you infect the market by not having a suitable demographic age balance. It's all a bit of a mess, really.
So, as you reference, such a situation produces a toxic imbalance in the market where 'new blood' in terms of future generations are excluded.
This is the commoditisation of a market caused by excess investment/speculation capital.
gibbon said:
That's true, but I think expectations are being adjusted, and parents and family 'wealth' is being transferred to help out the generation below, a process being pushed even harder by various economic drivers also.
Sadly this is very much a middle class thing, and the gap between the haves and the have nots is widening again, but rather than this being a temporary move, I think we are returning to the normal from what has been a two generation or so temporary paradigm. Im not saying I agree with it, its just the way I see it.
You are right though, 'we' could vote with out feet, but I doubt people will, I don't know, but I would guess the voting demographic is very much at odds with the type of people we are talking about, until that changes, nothing will, and even then you are left with a massive economic problem.
The trouble with falling back on 'in family' trickledown to get the next generation into the ladder is that it destroys upward mobility which is very bad for social cohesion. People must be free to advance as best as possible on their own merit. They will always be at a disadvantage without parental support but not blocked out as currently. Sadly this is very much a middle class thing, and the gap between the haves and the have nots is widening again, but rather than this being a temporary move, I think we are returning to the normal from what has been a two generation or so temporary paradigm. Im not saying I agree with it, its just the way I see it.
You are right though, 'we' could vote with out feet, but I doubt people will, I don't know, but I would guess the voting demographic is very much at odds with the type of people we are talking about, until that changes, nothing will, and even then you are left with a massive economic problem.
DonkeyApple said:
scenario8 said:
Just how accurate is that assumption that controlling credit will control house prices? What proportion of properties are bought with a large mortgage LTV/easily managed mortgage/any mortgage/no mortgage? How much has foreign money driven prices (within the M25 (which I would suggest is behind much of the Average UK House Price Soar headlines in the media))? In my view, large rate rises will disproportionately hit those that were just unfortunate not to have reached that stage in life until recently where property purchases were possible. They "had to" pay a fortune for their house and now the repayments will increase. I can't see how it will particularly help those younger/poorer than them to get onto the ladder as afordability will take a dive.
It's all a bit of a mess, really.
The more important part of this is that the larger the deposit requirement the fewer new buyers at the bottom of the market and the increase in the cash rich existing owners buying more. Thus, you infect the market by not having a suitable demographic age balance. It's all a bit of a mess, really.
So, as you reference, such a situation produces a toxic imbalance in the market where 'new blood' in terms of future generations are excluded.
This is the commoditisation of a market caused by excess investment/speculation capital.
DonkeyApple said:
scenario8 said:
Just how accurate is that assumption that controlling credit will control house prices? What proportion of properties are bought with a large mortgage LTV/easily managed mortgage/any mortgage/no mortgage? How much has foreign money driven prices (within the M25 (which I would suggest is behind much of the Average UK House Price Soar headlines in the media))? In my view, large rate rises will disproportionately hit those that were just unfortunate not to have reached that stage in life until recently where property purchases were possible. They "had to" pay a fortune for their house and now the repayments will increase. I can't see how it will particularly help those younger/poorer than them to get onto the ladder as afordability will take a dive.
It's all a bit of a mess, really.
The more important part of this is that the larger the deposit requirement the fewer new buyers at the bottom of the market and the increase in the cash rich existing owners buying more. Thus, you infect the market by not having a suitable demographic age balance. It's all a bit of a mess, really.
So, as you reference, such a situation produces a toxic imbalance in the market where 'new blood' in terms of future generations are excluded.
This is the commoditisation of a market caused by excess investment/speculation capital.
jdw1234 said:
DonkeyApple said:
scenario8 said:
Just how accurate is that assumption that controlling credit will control house prices? What proportion of properties are bought with a large mortgage LTV/easily managed mortgage/any mortgage/no mortgage? How much has foreign money driven prices (within the M25 (which I would suggest is behind much of the Average UK House Price Soar headlines in the media))? In my view, large rate rises will disproportionately hit those that were just unfortunate not to have reached that stage in life until recently where property purchases were possible. They "had to" pay a fortune for their house and now the repayments will increase. I can't see how it will particularly help those younger/poorer than them to get onto the ladder as afordability will take a dive.
It's all a bit of a mess, really.
The more important part of this is that the larger the deposit requirement the fewer new buyers at the bottom of the market and the increase in the cash rich existing owners buying more. Thus, you infect the market by not having a suitable demographic age balance. It's all a bit of a mess, really.
So, as you reference, such a situation produces a toxic imbalance in the market where 'new blood' in terms of future generations are excluded.
This is the commoditisation of a market caused by excess investment/speculation capital.
Most care homes are very highly leveraged so revenue funds bank debt so that's money lost from the direct system.
The key is to decommoditise residential property so as to remove the excess cash from the upper demographic from the market.
Are any parents here buying buy to let's now or have done with the idea of giving then to their kids once they become a sensible age rather than needing huge deposits in the future their houses will be in essence mortgage free.
You as a parent could force then to take out a decent mortgage so that they are not suddenly totally debt freed and own property hence splash £ on stuff. A way to control their spend - the difference going to the parent but then clearly later in life you have the option of gifting that to them of grand kids, or of course yourself and partner as you need to enjoy too and have done more than enough.
You as a parent could force then to take out a decent mortgage so that they are not suddenly totally debt freed and own property hence splash £ on stuff. A way to control their spend - the difference going to the parent but then clearly later in life you have the option of gifting that to them of grand kids, or of course yourself and partner as you need to enjoy too and have done more than enough.
gibbon said:
We are in a new era of house values
We really aren't. Read this bookhttp://www.amazon.co.uk/Houses-Historical-Analysis...
Good bit in the Standard tonight on this. Apparently prices in 10 London boroughs have fallen and borrowing is down. I should think the adjustment period must soon start. But it may take some time to cleanse the market of all the overpriced crap currently sitting on there.
Annoyingly estate agents have got tactics and rather than reduce properties on the web they remove and relist at a new price and there is no way to see what they were asking for it in the first place unless you have a good memory.
Annoyingly estate agents have got tactics and rather than reduce properties on the web they remove and relist at a new price and there is no way to see what they were asking for it in the first place unless you have a good memory.
Very few people are short term investors let alone the rare beast the flipper.
Most look to medium to long term ownership so if your happy with the price buy it.
I would only ever buy a house which I'd happily live in myself always go for the best area possible that we can afford. School catchment low crime areas etc. Personally I generally don't buy houses needing major work - I can do DIY but that would mean evenings weekends and annual leave and even then be end result would be only ok. So I go for the knee needing maybe new kitchens bathrooms windows/doors carpets and a. Lick of paint. I always put up brand new fences and if its rendered exterior the outside is always reprinted along with guttering and weatherboard. That can be done in a month worst case and it goes onto the market to let with the knowledge its going to be very sound for a long period of time.
Most look to medium to long term ownership so if your happy with the price buy it.
I would only ever buy a house which I'd happily live in myself always go for the best area possible that we can afford. School catchment low crime areas etc. Personally I generally don't buy houses needing major work - I can do DIY but that would mean evenings weekends and annual leave and even then be end result would be only ok. So I go for the knee needing maybe new kitchens bathrooms windows/doors carpets and a. Lick of paint. I always put up brand new fences and if its rendered exterior the outside is always reprinted along with guttering and weatherboard. That can be done in a month worst case and it goes onto the market to let with the knowledge its going to be very sound for a long period of time.
okgo said:
Good bit in the Standard tonight on this. Apparently prices in 10 London boroughs have fallen and borrowing is down. I should think the adjustment period must soon start. But it may take some time to cleanse the market of all the overpriced crap currently sitting on there.
Annoyingly estate agents have got tactics and rather than reduce properties on the web they remove and relist at a new price and there is no way to see what they were asking for it in the first place unless you have a good memory.
If thats the case, then is there really any need to increase rates at all?Annoyingly estate agents have got tactics and rather than reduce properties on the web they remove and relist at a new price and there is no way to see what they were asking for it in the first place unless you have a good memory.
youngsyr said:
I don't follow?
I'll try and make it as simple as I can...Lets say you owe 80k.
Mortgage at 1.29%
Overpay by 50%. You give up 1% on the amount you overpay (what you could have earned in investments/savings)
5 years later rates go up to (say) 3%
You've paid off £40k, so are paying 3% interest on the remaining 40k until its paid off.
If you hadn't of overpaid you'd now have only paid off something like £25k, leaving you paying 3% on £55k. So, in short you're going to pay more interest. You do have the extra 1% you earned on savings to offset this though.
I don't know at which point you are better off either way. Like I said, some clever person can probably work out a formula for it.
Welshbeef said:
Are any parents here buying buy to let's now or have done with the idea of giving then to their kids once they become a sensible age rather than needing huge deposits in the future their houses will be in essence mortgage free.
You as a parent could force then to take out a decent mortgage so that they are not suddenly totally debt freed and own property hence splash £ on stuff. A way to control their spend - the difference going to the parent but then clearly later in life you have the option of gifting that to them of grand kids, or of course yourself and partner as you need to enjoy too and have done more than enough.
We have allocated two of ours for our daughters. They will be able to live in them or get the rental income from them from 21 and they'll own them outright at 25You as a parent could force then to take out a decent mortgage so that they are not suddenly totally debt freed and own property hence splash £ on stuff. A way to control their spend - the difference going to the parent but then clearly later in life you have the option of gifting that to them of grand kids, or of course yourself and partner as you need to enjoy too and have done more than enough.
Crafty_ said:
youngsyr said:
I don't follow?
I'll try and make it as simple as I can...Lets say you owe 80k.
Mortgage at 1.29%
Overpay by 50%. You give up 1% on the amount you overpay (what you could have earned in investments/savings)
5 years later rates go up to (say) 3%
You've paid off £40k, so are paying 3% interest on the remaining 40k until its paid off.
If you hadn't of overpaid you'd now have only paid off something like £25k, leaving you paying 3% on £55k. So, in short you're going to pay more interest. You do have the extra 1% you earned on savings to offset this though.
I don't know at which point you are better off either way. Like I said, some clever person can probably work out a formula for it.
Crafty_ said:
Does that make me working class then ? 
I don't see any reason not to pay down on a mortgage if you can afford it. Its not like I'm going without to do so.
Neither do I. Being in debt is wagering that your future earning power will be sufficient to meet your financial obligations. Why make a bet if you don't need to win and will suffer if you lose?I don't see any reason not to pay down on a mortgage if you can afford it. Its not like I'm going without to do so.
It's all very well chasing money, but being free of debt gives you such a psychological advantage in life that I don't believe indebtedness is actually worth the risks and stress in the long run. No pockets in a shroud, as they say...
Gaspode said:
Crafty_ said:
Does that make me working class then ?
I don't see any reason not to pay down on a mortgage if you can afford it. Its not like I'm going without to do so.
Neither do I. Being in debt is wagering that your future earning power will be sufficient to meet your financial obligations. Why make a bet if you don't need to win and will suffer if you lose?I don't see any reason not to pay down on a mortgage if you can afford it. Its not like I'm going without to do so.
It's all very well chasing money, but being free of debt gives you such a psychological advantage in life that I don't believe indebtedness is actually worth the risks and stress in the long run. No pockets in a shroud, as they say...
You are making the error of measuring individual debts and not the overall financial position of an individual.
Let's take 2 people:
Person 1 has a £100k mortgage and £100k in cash in the bank.
Person 2 has a £50k mortgage but nothing in the bank.
Who is in greater debt?
oyster said:
Gaspode said:
Crafty_ said:
Does that make me working class then ?
I don't see any reason not to pay down on a mortgage if you can afford it. Its not like I'm going without to do so.
Neither do I. Being in debt is wagering that your future earning power will be sufficient to meet your financial obligations. Why make a bet if you don't need to win and will suffer if you lose?I don't see any reason not to pay down on a mortgage if you can afford it. Its not like I'm going without to do so.
It's all very well chasing money, but being free of debt gives you such a psychological advantage in life that I don't believe indebtedness is actually worth the risks and stress in the long run. No pockets in a shroud, as they say...
You are making the error of measuring individual debts and not the overall financial position of an individual.
Let's take 2 people:
Person 1 has a £100k mortgage and £100k in cash in the bank.
Person 2 has a £50k mortgage but nothing in the bank.
Who is in greater debt?
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