Viewing / Buying a house

[itdoesntmatterwhatthissay]

34 minutes ago, ender4 said:

21 times?!!    over how long a period. 

so much cost in fees and stamp duty! 

I'm 35 and the eldest so it's over a 37 year period. A couple of those moves were to rented while we made choices on where to go/what to do.
I loved living in so many different places, though I never had a set group of friends and every time I started to, we were off! My mum got three school bus routes moved to accommodate our travel, ha.

I might do a calculation of stamp duty if I come back to Brum. I'm sure they've kept all documentation.

[Kingman]

 Be careful out there sports fans!

Fears of ‘risky mortgage bubble’ as buyers stretch to afford homes 

https://www.thetimes.co.uk/article/fears-of-risky-mortgage-bubble-as-buyers-stretch-to-afford-homes-n7hwk3h7k

  Quote

Fears of a “risky mortgage bubble” are growing as the number of people with super-sized home loans has accelerated sharply, putting tens of thousands of borrowers at risk if interest rates rise.

Up to 140,000 people took out a home loan of more than 4.5 times their income over the past year, an increase of 15 per cent on the previous 12 months, analysis of Bank of England lending figures shows.

The proportion of borrowers with these high-risk loans is now double the level before the financial crisis struck.

Househunters who overextend themselves to buy properties at the peak of the market are storing up trouble, experts warn.

Jeremy Willmont, of Moore Stephens, the accountancy firm, said: “Borrowers might be becoming too comfortable with low interest rates. Some are stretched even with rates at their current record low, so an increase of just half a percentage point would represent a significant relative jump in mortgage repayments.

“Too many homeowners ignore the possibility of a decline in house prices or that their salaries will not rise faster than inflation.”

No one under the age of 28 has experienced an increase in the cost of borrowing in their adult life but last month three of the eight members of the Bank’s monetary policy committee voted to raise the base rate from its low of 0.25 per cent.

The Bank of England defines mortgages of more than 4.5 times salary as “risky”.

In 2014, it introduced a cap of 15 per cent on the proportion of home loans that lenders can make above this income multiple. It said at the time that highly indebted households were more vulnerable. “In an economic downturn, there was a greater risk that such borrowers might need to cut spending sharply, making recessions deeper,” it added.

This week Alex Brazier, the Bank’s director of financial stability, said that a sharp rise in personal loans could be a danger to the economy and that lenders were at risk of entering “a spiral of complacency” about mounting debt. “Lending standards can go from responsible to reckless very quickly,” he said.

The Bank’s figures show that almost one in ten home loans are at or above 4.5 times salary compared with one in 15 in 2007. Another one in six mortgage customers borrow just below this “risk threshold”. Almost one in 100 borrow more than five times their salary.

Bank officials say that income multiples have grown mainly because of house price growth.

The figures also show an increase in lending to borrowers with small deposits. The number of loans worth more than 90 per cent of a property’s value has jumped by 35 per cent to almost a quarter of a million in the past year. However, this remains significantly below the 2007 level.

This week Virgin Money said that house prices in London and other cities may start falling, raising the prospect of negative equity for many borrowers.

Peter Tutton, of StepChange, the debt help charity, said: “The level of consumer borrowing is high by historical standards and the numbers of people seeking help are at record levels. Now is the time for government to acknowledge that debt is a major public policy issue.”

Behind the storyAlarm bells should be ringing”, the debt charity Step Change said at the start of this year after receiving a record 600,000 calls for help in 2016 (Tom Knowles writes).

The figures on consumer debt show this is not hyperbole. Households have been on a borrowing binge and are saving less than at any time in the past 50 years. The growth in credit card use, personal loans and car purchase schemes is rising at the fastest pace in more than a decade. As The Times reveals, the proportion of people taking out a home loan over 4.5 times their income has risen 15 per cent over the past year.

The Bank of England is worried, especially by the growing dependence on credit cards and personal loans.

In principle, debt is good for the economy. More debt means more spending — and more growth in the economy. With interest rates so low, consumers can binge on cheap money. The rate on a £10,000 loan has fallen from 10 per cent in 2009 to 4 per cent today.

Nearly 90 per cent of new cars are sold using finance deals and experts believe a downturn could result in thousands of drivers unable to keep up payments.

Mortgage holders are also in danger of becoming too comfortable with low interest rates, perhaps forgetting what even a half a percentage point rise could do to repayments.

The ingredients for a credit boom-bust look to be in place.

 

[Dr_Pangloss]

Funny how the BoE is "worried", when it is a direct consequence of it's policy to keep interest rates so low, that there has been a "growing dependence on credit cards and personal loans". Of course, there's economic arguments for keeping rates low (investment etc) but this was always going to one of the outcomes.

The issue is that permanently low rates have not triggered the required levels of investment that the BoE wanted, rather firms have invariably been hording cash, whilst the everyday consumer has been given virtually no 'incentive' to save due to the pathetic return they will get on their money.

[Kingman]

1 hour ago, Dr_Pangloss said:

Funny how the BoE is "worried", when it is a direct consequence of it's policy to keep interest rates so low, that there has been a "growing dependence on credit cards and personal loans". Of course, there's economic arguments for keeping rates low (investment etc) but this was always going to one of the outcomes.

The issue is that permanently low rates have not triggered the required levels of investment that the BoE wanted, rather firms have invariably been hording cash, whilst the everyday consumer has been given virtually no 'incentive' to save due to the pathetic return they will get on their money.

Yeah there is a similar article in the Daily Mail, Can't be much clearer than this...

"Just after the last crash, in November 2008, the Queen asked a roomful of academics and economists why they hadn’t seen it coming. She won’t have to do that next time. This week the klaxons started to sound. Another crash is on the way.

And so if you wake up one morning and the cashpoint machines are empty, and there are long, angry queues outside famous high street banks, you, the Queen and the Government will have no excuse for being surprised." 

Car 

[villan-scott]

We have listed our house on the market this week. We've been here 3 and a half years and were first time buyers when we moved in. 

We've benefitted from a rise in property price and gained a fair bit of equity in that time. 

We need somewhere bigger now the little one is 18 months old, and there's talk of baby number 2 on the horizon. We're only in a 2 bed so need more space!

We've got a healthy budget of around 210k in Kidderminster, but there's nothing much jumping out at us. Remaining patient for now, but had some good interest in our property the last few days. 

Moving into our first home was a case of that'll do, this time round we know much more about what we want and need, so a little more picky! All good fun though!

Edited July 30, 2017 by villan-scott

[Jareth]

Most dysfunctional aspect of the market is that people are unable to move up the ladder, low stock is keeping prices high, but transactions are very depressed. Definitely a correction in prices on the way, but don't imagine it will be that dramatic.

[Kingman]

10 hours ago, Jareth said:

Most dysfunctional aspect of the market is that people are unable to move up the ladder, low stock is keeping prices high, but transactions are very depressed. Definitely a correction in prices on the way, but don't imagine it will be that dramatic.

 

BoE interest rate meeting this week, Guess it's inevitable they will raise interest rates to put a cap on all this reckless lending.

Wonder what BS Carnage will come out with as per usual.

Edited July 31, 2017 by Kingman

[Xela]

11 hours ago, Kingman said:

 

BoE interest rate meeting this week, Guess it's inevitable they will raise interest rates to put a cap on all this reckless lending.

Wonder what BS Carnage will come out with as per usual.

The banks aren't expecting a rate rise and the markets aren't predicting it. 

If they go up this week it'll be a shock. 

[TrentVilla]

1 hour ago, Xela said:

The banks aren't expecting a rate rise and the markets aren't predicting it. 

If they go up this week it'll be a shock. 

No chance they are going up this week, in my opinion at least.

@omariqy By the way did you see the story about the incorrect application of the 2nd home stamp surcharge in cases like yours?

[Kingman]

2 hours ago, Xela said:

The banks aren't expecting a rate rise and the markets aren't predicting it. 

If they go up this week it'll be a shock. 

Yeah I would be very surprised if anything is announced on Thursday, probably 0.5% in the spring or shortly after The FED. 

Edited July 31, 2017 by Kingman

[TrentVilla]

Just now, Kingman said:

Yeah I would be very surprised if anything is announced on Thursday, probably 0.5% in the spring or shortly after FED. 

They won't move 0.5% in one go (not sure if that is what you meant) but I can see a 0.25% rise perhaps.

[Kingman]

1 hour ago, TrentVilla said:

They won't move 0.5% in one go (not sure if that is what you meant) but I can see a 0.25% rise perhaps.

My bad.. Yea Up to 0.5%.from 0.25%.

[TrentVilla]

 

In the current market place, if a crash is looming sparked by interest rate rises releasing equity on a low fixed rate and putting it into either another property or savings will be pretty appealing to a lot people I suspect.

 

[omariqy]

32 minutes ago, TrentVilla said:

No chance they are going up this week, in my opinion at least.

@omariqy By the way did you see the story about the incorrect application of the 2nd home stamp surcharge in cases like yours?

No I didn't mate - what was that?

[TrentVilla]

2 hours ago, omariqy said:

No I didn't mate - what was that?

 

Full article on link but extract below

The Government has handed back £127m stamp duty to 10,700 homeowners who overpaid following the introduction of the controversial "second property surcharge" in April 2016.

An additional 3pc surcharge on second properties was introduced last year as a measure aimed to slow the growth of buy-to-let. But it quickly drew criticism, including from those home-movers who buy their next property before selling their current one.

Under a “replacement main residence” rule, people who do this who must pay the higher stamp duty rate upfront. They are then eligible for a refund if they sell their former home within three years.

Government figures, released today, reveal HMRC has had to give refunds on 10,700 transactions at an average cost of £11,869.

Lucy Brennan, a partner at accountancy firm Saffery Champness, said having to make a payment of that size could prevent families from moving on to their ideal property.

http://www.telegraph.co.uk/tax/news/stamp-duty-refunds-10000-people-wrongly-overpayed-second-homes/

[omariqy]

49 minutes ago, TrentVilla said:

 

Full article on link but extract below

 

 

Thanks mate. Yeah I've applied for my refund and it's pretty substantial. Luckily I had the funds but I could've easily been shit out of luck had I not.

[Milfner]

Didn't think it was worth it's own thread so I'll put it here.

Can anyone recommend a second hand outlet/decent charity shop for furniture in the Birmingham area? Been told of the British Heart Foundation as one and a couple others so far. 

[AVFC_Hitz]

Google Betel. They used to have a place at the bottom of the Pershore Road near town but I think they've moved.

[TrentVilla]

 

Rates held again and growth forecasts cut.

Rate rises are coming but they will be a while yet and slow when they do start.

[Kingman]

Unlike the Express… 

Is a property market CRASH imminent? Expert warns house prices could fall to lows of £70k

PROPERTY market crash could see prices of property for sale could plummet to £70,000, experts warned last month. Now a property expert has given the latest news and updates on whether a crash is possible. A crash could take nearly eight years to recover.

http://www.express.co.uk/life-style/property/836056/property-market-crash-uk-news