Mortgages

[Nori1958]

Thats an informative thread?

Only for people who don't want to be informed (because they don't like the information that is presented)

Thread.......not post

[burnleymik]

Thats an informative thread?

Only for people who don't want to be informed (because they don't like the information that is presented)

....or that the information is clearly presented with a political bias. It's a shame the thread can't just stay on point.

[equinox]

Has anyone on here got an old Northern Rock mortgage that they can't get out of?

[Quickenthetempo]

Good informative thread helping people. No need for politics like above.

Apologies for having a whinge at the Government.

Please carry on being helpful.

[RicardoMontalban]

Thats an informative thread?

Only for people who don't want to be informed (because they don't like the information that is presented)

Trying to have an informed discussion as to why the underperforming economy is currently having the effects it is, without mentioning politics, does seem fairly fruitless. The two are fairly entwined.

[Lancasterclaret]

....or that the information is clearly presented with a political bias. It's a shame the thread can't just stay on point.

There is (unfortunately) a huge political element to this, whether you like it or not

[bfcjg]

I remember the worst MP Burnley ever had Kitty Usher, her buzz phrase copied from Blair was post industrial Britain,she used it once after a disastrous month for local jobs, a hugh switchgear company closed on Heasanford and transferred production to East Europe, the knock on effect on small engineering suppliers, then a company on Rossendale Road industrial estate that made car seats and upholstery closed, but Kitty " get that Artex out of my house on expenses" Usher said not to worry and, Sainsburys were taking on at a new supermarket site.
Therein lies the problem, no industrial base,hostages to imports,not enough high tech jobs so people have to borrow for cars etc. Peter Pike worked at Mullards,great bloke and MP who knew how vital industry is.

[Lancasterclaret]

https://twitter.com/CameraLeon/status/1 ... 5697822720

Its a bit home made, but it shows the difference between house prices and living costs

[Lowbankclaret]

Inflation has been caused in the main by a large rise in fuel prices and the cost of gas.

Food like cucumbers and tomatoes have risen on supply issues caused by the gas price.

Fuel, petrol and diesel have almost returned back to pre war prices, petrol was around 135 ish if I remember correctly . It was in the £1,30 range on Accy road the other week.

UK gas prices did get into normal territory the other week before a sharp rise last week. But it’s still down 60% on a year ago. But we are still paying massively inflated prices for gas and electric. I do not get why gas and electric prices have not reduced dramatically in line wholesale prices.

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Well there is a way for some, Octopus agile import tariff. Lots talking about it on the octopus unofficial group on Facebook. Lots of people saving money

IMG_1785.png (526.87 KiB) Viewed 2199 times

I know it’s a bit simplistic, but inflation should be coming down and would be if we were not being overcharged for gas and electric. In my humble opinion.

[BFC Gold]

A really informative hit piece on the looming mortgage crisis was posted on Youtube this morning by Neil McCoy-Ward. If anyone`s brave enough to face the reality of what`s coming this year they should go take a look.

[littlemissclaret]

https://twitter.com/CameraLeon/status/1 ... 5697822720

Its a bit home made, but it shows the difference between house prices and living costs

But not interest rates.... House prices are largely a consequence of those rates. The flat I bought in 1990 (at 14.5%) was £64k. Previously £100k. If you disregard Interest Rates then 1990 was a period when property was very affordable, but that isn't half the story. 1988 no so much, but rates were much lower.

[Lancasterclaret]

But not interest rates.... House prices are largely a consequence of those rates. The flat I bought in 1990 (at 14.5%) was £64k. Previously £100k. If you disregard Interest Rates then 1990 was a period when property was very affordable, but that isn't half the story. 1988 no so much, but rates were much lower.

I bought in the 90s

My wage was average for the area, and the house price was about twice my wage

The wage is now roughly a few grand more, while that house is now selling at 4 or 5 times as much

Its not good

[Lowbankclaret]

I bought in the 90s

My wage was average for the area, and the house price was about twice my wage

The wage is now roughly a few grand more, while that house is now selling at 4 or 5 times as much

Its not good

I bought my first terraced house in 1988-9, I cannot for the life of me remember how much it was, but think I was allowed 3 times my salary that I could borrow. I moved a year later and was I think allowed 3 times mine and half of my partners wages. The bungalow we bought maxed us out. I took out a ten year fixed rate.

[Big Vinny K]

The way that banks lent money in the late 80s could not be any different than it is today - especially post the mortgage market review a decade ago.

My first house in 1990 cost £40k. I can’t remember what salary I was on back then but it was much more than I needed it to be to meet the multiplier criteria. And the reason for that was that property prices were so low back then. When I sold the house 4 years later despite spending at least £10k on refurbishing it from top to bottom I still only sold it for the exact same price I paid for it - £40k because the property market had taken a blip. But that was all relative because I got a much bigger house for £76k and again my mortgage was well within the multiplier.

For years all banks were really interested in was the valuation of the property. There was no real assessment of affordability. Credit checks were as basic as if you had registered against you county court judgements you had to prove that these had been repaid or were registered in error etc. Checking your income and expenditure was pretty sporadic across lenders.

It’s one of the reasons why bad debts at banks were some high. But compared to commercial lending / mortgages this was nothing. That really was the wild Wild West……and no real surprise that it ended up in the whole sub prime and derivatives market as the banks and their institutional shareholders just got greedier and greedier.

Now the whole financial systems and banks are light years away in terms of how they are regulated. Unfortunately the main issues that exist in the housing market today are around demand and supply. The demand for housing massively outstrips supply and has got worse every year for at least 2 decades. Mortgage rates are relatively higher (as in the margin taken by banks) partly because the supply of lenders and mortgages as reduced but mainly because the pricing of these products by banks reflects the cost of providing mortgages (and without going into technical detail the cost of meeting regulation, prudential risk, capital and liquidity requirement etc etc since the 2007 / 2008 banking crash).

It’s way too simplistic to point out the billions the banks are making because this does not mean they make most of this from their residential mortgage books because that is simply not the case and hasn’t been for a couple of decades at least now.

[bfcjg]

We bought our first terraced house in the early eighties in a very good area for just over £10k, we decided at the time to get a property that we could easily manage on one wage, when we eventually down sized we looked on Zoopla for the prices in the area we first bought and were stunned at the cost, no way a young couple could afford it off one wage and still have a reasonable standard of living. It's disgusting how no government has intervened to halt house price inflation. ok, we are all responsible as we want the most we can, but surely governments should have done or do something. My children are on the ladder but when I think of what they have to pay to keep a roof over their and my grandchildren heads I could weep, they are just about in positive equity but cannot move upwards now.

[claret2018]

I said earlier in the thread that I moved recently, and we looked at quite a few houses in different areas in the RV.

The asking price for some of the new builds were absolutely outrageous. Half a million quid for a “4 bed” detached, which was in reality a single lounge and a kitchen downstairs, with 4 small bedrooms upstairs, along with a small square garden that was nothing more than a patch of grass surrounded by fencing and massively overlooked in every direction.

Throw in the appalling build quality on a lot of new estates and you realise something drastic has to change.

[ALP]

I can't be bothered reading all these posts, and much as I feel for people with the rates climbing, I was paying 15% in the early 80's, and my wage wasn't great either. We had two kids and I still to this day don't know how we survived, but I worked every hour that I could to pay the bills and we did it. Now I'm a saver I don't mind the rates climbing, the banks owe me quite a bit.

[agreenwood]

I’m always amazed at folk who went through historical struggles and have no problem with others going through similar stress and worry as if it’s some sort of right of passage.

If I had a really hard period in my life, I’m sure I’d be more empathetic to similar current day difficulties.

[Loyalclaret]

It is probably worth reading the his thread then ALP

[agreenwood]

As an aside it’d be interesting to know if the interest rate rises are as quick to be passed on to savers as they are taken from borrowers. Equally whether they are as beneficial to savers as they are punitive to borrowers.

There were some media reports a few months ago that the banks had reverted to type and weren’t quite as quick the pass on the benefits of the rate risers to savers.

[pushpinpussy]

I have no sympathy whatsoever with people who are struggling to pay for their mortgages. When myself and the wife went for a mortgage we were offered a mortgage for nearly half a million pounds more than we wanted due to our income. But we refused it. Why? because we did not let ourselves get so caught up in keeping up with the Jones’s and living lavish lives.

[JohnMcGreal]

I have no sympathy whatsoever with people who are struggling to pay for their mortgages. When myself and the wife went for a mortgage we were offered a mortgage for nearly half a million pounds more than we wanted due to our income. But we refused it. Why? because we did not let ourselves get so caught up in keeping up with the Jones’s and living lavish lives.

So much bitterness and hate. It's really quite sad.

[Darthlaw]

In fairness John, most of us know when a child acts out because it’s not getting the attention it craves. The only thing shocking about that post is finding out PPP has a wife.

[Swizzlestick]

PPP is a wind up merchant account - just one that forgot to be funny.

[Big Vinny K]

In fairness John, most of us know when a child acts out because it’s not getting the attention it craves. The only thing shocking about that post is finding out PPP has a wife.

Yeh - he met her in Spain apparently

[Boss Hogg]

I said earlier in the thread that I moved recently, and we looked at quite a few houses in different areas in the RV.

The asking price for some of the new builds were absolutely outrageous. Half a million quid for a “4 bed” detached, which was in reality a single lounge and a kitchen downstairs, with 4 small bedrooms upstairs, along with a small square garden that was nothing more than a patch of grass surrounded by fencing and massively overlooked in every direction.

Throw in the appalling build quality on a lot of new estates and you realise something drastic has to change.

Think some of the large building firms are better than others in terms of quality. Certainly on estates that have been up a few years. It is noticeable now how many houses on these estates are getting smaller and smaller in terms of room size. The other problem is a 400k house has the same level of build quality as a100K house.

[bpgburn]

I’m always amazed at folk who went through historical struggles and have no problem with others going through similar stress and worry as if it’s some sort of right of passage.

If I had a really hard period in my life, I’m sure I’d be more empathetic to similar current day difficulties.

It also amazes me that those going through this terrible current situation are quick to almost discredit what others went through back in the 80's because it is worse now due to the disparity between mortgage payments/cost of living and wages. Now that may be the case but that doesn't lessen the struggles people faced back then and it doesn't reduce the amount of young families who lost their homes. It's also worth remembering that there was a lot of unscrupulous lenders imposing charges way above that of the 16% rate due to small print in their T&C's and were actively pursuing repossessions.

Maybe some of the bitterness and lack of empathy being shown towards what others went through 40 odd years ago by a number of posters on here is starting to rub off which is a shame as we are all in it together as I have grown kids living through it now and all we can do is help them out as best we can now we are in a position to do so.

These problems are pretty much generational, it will come around again, and will more than likely be worse than it is now, when it does I hope they have the sense to realise that the financials may differ from generation to generation but the repercussions and the impact to lives are the same!!

[dushanbe]

There are all sorts of technical reasons for inflation, but theres also human nature. In an environment where people are constantly told that prices are high, everything is going up and theres an expectation of higher prices, guess what you get? Higher prices. People (companies and individuals) see an opportunity and put their prices for things up, whether they actually need to or not, then you are in a spiral.

Mobile phone providers are a case in point, they are given a window to increase their prices annually to a level set by ofcom, regardless of what their actual costs might be and they do it, right to the limit.

[Lancasterclaret]

It also amazes me that those going through this terrible current situation are quick to almost discredit what others went through back in the 80's because it is worse now due to the disparity between mortgage payments/cost of living and wages. Now that may be the case but that doesn't lessen the struggles people faced back then and it doesn't reduce the amount of young families who lost their homes. It's also worth remembering that there was a lot of unscrupulous lenders imposing charges way above that of the 16% rate due to small print in their T&C's and were actively pursuing repossessions.

Maybe some of the bitterness and lack of empathy being shown towards what others went through 40 odd years ago by a number of posters on here is starting to rub off which is a shame as we are all in it together as I have grown kids living through it now and all we can do is help them out as best we can now we are in a position to do so.

These problems are pretty much generational, it will come around again, and will more than likely be worse than it is now, when it does I hope they have the sense to realise that the financials may differ from generation to generation but the repercussions and the impact to lives are the same!!

You'll have to show the posts that highlight the lack of empathy and bitterness towards what you went through

Its really easy to find the ones that show no empathy and bitterness to what the young/middle aged are going now through btw

[Swizzlestick]

It also amazes me that those going through this terrible current situation are quick to almost discredit what others went through back in the 80's because it is worse now due to the disparity between mortgage payments/cost of living and wages. Now that may be the case but that doesn't lessen the struggles people faced back then and it doesn't reduce the amount of young families who lost their homes. It's also worth remembering that there was a lot of unscrupulous lenders imposing charges way above that of the 16% rate due to small print in their T&C's and were actively pursuing repossessions.

Maybe some of the bitterness and lack of empathy being shown towards what others went through 40 odd years ago by a number of posters on here is starting to rub off which is a shame as we are all in it together as I have grown kids living through it now and all we can do is help them out as best we can now we are in a position to do so.

These problems are pretty much generational, it will come around again, and will more than likely be worse than it is now, when it does I hope they have the sense to realise that the financials may differ from generation to generation but the repercussions and the impact to lives are the same!!

All pretty much one way traffic from what I can see - starting with Nori's one man version of the Four Yorkshiremen sketch right through to ALP not bothering to read the thread and happy for the next generation to suffer while ignoring increasing average salary/house price disparities.

[bpgburn]

You'll have to show the posts that highlight the lack of empathy and bitterness towards what you went through

Its really easy to find the ones that show no empathy and bitterness to what the young/middle aged are going now through btw

First of all I don't have to show anything. Secondly I don't agree with the lack of empathy shown towards either situations.

As for bitterness, is that what touched a nerve?

[Big Vinny K]

First of all I don't have to show anything. Secondly I don't agree with the lack of empathy shown towards either situations.

As for bitterness, is that what touched a nerve?

I think what is being said is that nobody has said or shown any lack of empathy for previous generations hardships and nobody is denying it.
But there are comments on here (not from you) showing a lack of empathy for the issues people are facing now.
It really is stating the obvious that other generations have struggled - so you could ask why do people raise this point ? Again not saying this is you but you can definitely see why some on here are raising this.

As I said above acknowledging previous generations have also struggled is not going to help you one bit if you are in this situation now. I really do not get why people feel the need to raise it unless they have some actual life experience which could help a person today which is a bit better than ‘stiff upper lip and get on with it like we did etc etc”

[Lancasterclaret]

First of all I don't have to show anything. Secondly I don't agree with the lack of empathy shown towards either situations.

As for bitterness, is that what touched a nerve?

Yes, you do

You can't claim something and then admit you've not actually read the thread!

What touches a nerve with me is the lack of empathy and understanding from people who have been through the same thing

[milkcrate_mosh]

But not interest rates.... House prices are largely a consequence of those rates. The flat I bought in 1990 (at 14.5%) was £64k. Previously £100k. If you disregard Interest Rates then 1990 was a period when property was very affordable, but that isn't half the story. 1988 no so much, but rates were much lower.

Using the data from that graph an average house in the 90s on a 30 year mortgage at 14.5% with a 10% deposit would be £636 a month - just over 35% of the average monthly wage.

A mortgage for a present day average house (30 years, 10% deposit) at 6% is £1283 a month which is over 40% of the average wage.

This is without factoring in having to save for a substantially larger deposit or that the government also no longer gives tax relief on the interest in the form of MIRAS. If the purchaser is a graduate they're also effectively paying a significantly higher effective tax rate with the student loan system than they would have done when trying to buy a house in the 90s.

If mortgage rates hit 14.5% now the above calculation would be about 85% of an average wage.

[aggi]

On the "why don't people just cut back a bit/you can buy a house on minimum wage" chat, I was talking to some friends last night with a couple of kids age 1 and 3. Their nursery fees will soon be increasing to £3k+ a month for a fairly standard nursery (in London).

[JohnMcGreal]

Don't forget that one of the main reasons for constantly inflating house prices was to keep a particular demographic happy and on side when it came to election time.

So for some of those people to then lash out at the poor buggers on the sharp end of that policy is not only unsympathetic, it's actually quite galling. A bit of self-awareness wouldn't go amiss.

[evensteadiereddie]

Spot on, JMG.

[Jjjack]

You'll have to show the posts that highlight the lack of empathy and bitterness towards what you went through

Its really easy to find the ones that show no empathy and bitterness to what the young/middle aged are going now through btw

Making themselves the victim here when people complain at house price rises vs wage rise. Ridiculous but like others have mentioned, some people seem to think struggling is a right of passage because they went through it instead of trying to promote positive change for the next generation.

[Lancasterclaret]

Making themselves the victim here when people complain at house price rises vs wage rise. Ridiculous but like others have mentioned, some people seem to think struggling is a right of passage because they went through it instead of trying to promote positive change for the next generation.

I have to admit I'd much prefer to live in a country where people don't have to struggle to live but I guess its not for everyone

[Newcastleclaret93]

I have to admit I'd much prefer to live in a country where people don't have to struggle to live but I guess its not for everyone

I like that ethos but in reality has there ever been a society where individuals haven’t suffered?

Potentially with the rise of AI over the next 10 years we can get closer to that. But I just can’t see how it is realistic right now

[Lancasterclaret]

I like that ethos but in reality has there ever been a society where individuals haven’t suffered?

Potentially with the rise of AI over the next 10 years we can get closer to that. But I just can’t see how it is realistic right now

Its a political and social choice Newcastle

AI might help, but it might make it a lot worse as well

[Newcastleclaret93]

Its a political and social choice Newcastle

AI might help, but it might make it a lot worse as well

I appreciate that but because of the wide range of roles in society I just can’t see how there won’t be a class society (with the lower ends struggling). Communism would arguably be the closest political argument, but even that has caused some of the most suffering society has witnessed.

I honestly believe AI is the only realistic way that we will get remotely close to a society where people don’t suffer. But it would have to be based on every single person receiving a set amount of money a month, whilst the robots/AI generate the wealth.

[Lancasterclaret]

I appreciate that but because of the wide range of roles in society I just can’t see how there won’t be a class society (with the lower ends struggling). Communism would arguably be the closest political argument, but even that has caused some of the most suffering society has witnessed.

I honestly believe AI is the only realistic way that we will get remotely close to a society where people don’t suffer. But it would have to be based on every single person receiving a set amount of money a month, whilst the robots/AI generate the wealth.

I hope so

one thing is for sure, we don't want to go down the extremist route, whether that be communism or fascism

[Lancasterclaret]

Rate up by 0.5%

Not very good at all

[fatboy47]

Nothing but best wishes to all the people caught up in this vicious circle, and hope the pain is short-lived.

It could have been avoided in all honesty but that would have entailed upsetting this government's sponsors.

Hey ho.

[Darthlaw]

The tories, whilst the mortgage bomb goes off...

[taio]

80% of mortgage lenders are on a fixed rate. The rate increase obviously doesn't affect their ability to spend right now. So their net disposable income won't alter in the near term making you wonder how it will alter people's spending patterns. Hopefully more people will start overpaying their mortage or saving more in preparation for their fixed term ending, so spending less on goods. I really feel for many people and families over the next year or two.

[Darthlaw]

800k Fixed Mortgage deals set to end in the remainder of 2023 (including mine) and 1.4m in 2024.

I'm going to sneak in before any more rate rises and through battening down the hatches at Darth Towers we'll still be able to pay our mortgage despite payments going up by over 50%. I'm aware through conversations of friends that they are in similar situations and will not be able to afford repayments.

Unless energy payments take a nosedive in the remainder of 2023 and early 2024, there's gonna be some serious issues.

[SammyBoy]

I'm fixed at 2.5% til October 2025, but I'm not sure that'll be long enough to fully ride this out - time to start playing the lottery. Genuinely grim times for people coming to the end of their fix. The crazy price of houses today means even a few percent increase is disastrous for borrowers, not much slack to play with.

[pompeyclaret]

I fixed in Jan 22 when buying our house, and had a bad rate due to issues with my ex-wife. The idea was 2 years of higher rate (around 4%) then a reduction in Jan 24 when we renewed, with a better credit score.

Now with all the rate rises, we are looking at £1,000 extra a month+ on our mortgage, well over a 60% increase. We have little choice but to find the funds, as renting is expensive, and all the admin costs with selling/ moving.

I know rates can go up, but for such a steep increase, that massively impacts only a select aspect of the population, feels unfair.

If the idea is to decrease demand, surely an increase of VAT to 25% would make 'luxuries' more expensive, dampen demand, and possibly even bring in more funds to the treasury???