Viewing / Buying a house

[bobzy]

2 minutes ago, MCU said:

For someone looking to first time buy early next year this is grim to read.

Best of luck to you mate - it's a nightmare out there.  We got incredibly lucky fixing for 5 years toward the start of the year (I was looking at fixing for 2 years then fixing for 5 after that, missus talked me into a 5 year fix).  Think we're on 1.49% on that deal (think it was in Feb).  Same product with the same lender has interest rates of 5.39% now - the difference is about £600/month.

[Delphinho123]

1 hour ago, mottaloo said:

Do you mind me asking your LTV ?

Sure. 59%. 

It's bullshit though as they used a desktop valuation which is about 75k lower than what 3 estate agents told me it was worth 2 months ago. Whatever.

Edited October 11, 2022 by Delphinho123

[Delphinho123]

Just now, Delphinho123 said:

Sure. 59%. 

 

21 minutes ago, bobzy said:

Best of luck to you mate - it's a nightmare out there.  We got incredibly lucky fixing for 5 years toward the start of the year (I was looking at fixing for 2 years then fixing for 5 after that, missus talked me into a 5 year fix).  Think we're on 1.49% on that deal (think it was in Feb).  Same product with the same lender has interest rates of 5.39% now - the difference is about £600/month.

We've done the math, as I'm sure you have. It's all timing, timing, timing. (600*12)*5 = £36k. Not a bad little saving that, Bobzy. 

[Delphinho123]

59 minutes ago, ml1dch said:

LTV is pretty much irrelevant these days. There's no elasticity in the market, so there's basically one product,  "expensive", for everyone.

Nationwide for example, 60% gets you 5.89% and 90% gets 5.94%.

A lot of truth in this. 

I ran a couple of testers and it only really matters when you get down to 25% LTV to unlock more favourable rates.

Barclays as an example would give me the same rate for 60%/74% LTV. It's all a load of bollocks. FML. That mini budget cost me about £10k. I was ready to remortgage at 3.18% until that dopy idiot thought it would be a good idea to make bankers richer.

[Delphinho123]

1 hour ago, Demitri_C said:

There is no question we are heading to a crisis now. People are going to be absolutely **** with their mortgage repayments over the next few years

Can see things getting really nasty

I think people are expecting the bank to intervene but the BOE and the banks are not simply going to halt interest rate increases and start giving people money for free. 
Mortgage holidays won't help. We're not talking a few quid here, it's thousands of pounds. The government cant just bail people out of their mortgages either. 

I don't know what the end game is here. Reposessions I suppose? A lot of them?

[Xela]

3 hours ago, lapal_fan said:

The average HOUSEHOLD wage is £37k?!

Christ, @Xela spent that on bog roll last Tuesday

Quilted, for my pleasure.

[Xela]

16 minutes ago, Delphinho123 said:

I don't know what the end game is here. Reposessions I suppose? A lot of them?

I know people will find it hard to believe, but banks don't really want to repossess houses. Too much hassle and bad press. They'd much rather work with you to find a way forward. That could be moratoriums, reduced payments, or what I think will happen, extended terms. 

[Delphinho123]

23 minutes ago, Xela said:

I know people will find it hard to believe, but banks don't really want to repossess houses. Too much hassle and bad press. They'd much rather work with you to find a way forward. That could be moratoriums, reduced payments, or what I think will happen, extended terms. 

No, no, you're right. But even things like extended terms, moratoriums etc. this is stuff that is going to cripple people in the long run. You'll be running up more and more debt, maybe on a longer term, and ultimately, the result is you're broke either way. I guess we'll see a race to the bottom price wise in some areas. 

[villaglint]

10 minutes ago, Delphinho123 said:

No, no, you're right. But even things like extended terms, moratoriums etc. this is stuff that is going to cripple people in the long run. You'll be running up more and more debt, maybe on a longer term, and ultimately, the result is you're broke either way. I guess we'll see a race to the bottom price wise in some areas. 

Possibly in some areas but in general it seems it’ll be slow down in prices rather than a cliff edge crash. 
 

Lot of factors still pushing the market up as well as these newer factors pulling it down. To some extent they will trade off to avoid the cliff edge stuff. 

[bobzy]

2 hours ago, Delphinho123 said:

 

We've done the math, as I'm sure you have. It's all timing, timing, timing. (600*12)*5 = £36k. Not a bad little saving that, Bobzy. 

You know, I actually hadn't.  Who knows what it will be like 5 years down the line!

[Demitri_C]

2 hours ago, Xela said:

I know people will find it hard to believe, but banks don't really want to repossess houses. Too much hassle and bad press. They'd much rather work with you to find a way forward. That could be moratoriums, reduced payments, or what I think will happen, extended terms. 

I was going to say that i bet they would extend the mortages so your screwed for even longer and up to your eyeballs in debt for even longer. Win win for bank

[Xela]

6 minutes ago, Demitri_C said:

I was going to say that i bet they would extend the mortages so your screwed for even longer and up to your eyeballs in debt for even longer. Win win for bank

More interest payments for the bank. Like you say, a win for them.

 

[Xela]

The whole situation with housing has been shit for ages. As that chart @Genie posted proves.

Have house prices increased because people can borrow more from the banks or have banks been forced to allow people to borrow more so they can afford to buy? 

[Genie]

16 minutes ago, Xela said:

The whole situation with housing has been shit for ages. As that chart @Genie posted proves.

Have house prices increased because people can borrow more from the banks or have banks been forced to allow people to borrow more so they can afford to buy? 

I think it’s both. One creeps ahead, then the other catches up, then creeps ahead again, then catches up.

We’ve seen multipliers relaxed to allow people to buy who otherwise wouldn’t. And we’ve seen surges in prices when things like stamp duty discounts were introduced. 

[lapal_fan]

5 hours ago, Xela said:

I know people will find it hard to believe, but banks don't really want to repossess houses. Too much hassle and bad press. They'd much rather work with you to find a way forward. That could be moratoriums, reduced payments, or what I think will happen, extended terms. 

How about advise people not to borrow money they can't afford? 

I didn't overstretch my budget because I see year on year historic lows and think "well one day it'll go up and I'd be worse off".

I can't get over being sensible with money, only for idiots to borrow as much as they possibly can, at the time, to let them off because "we don't want to upset them".

They were thick enough to jump in two footed and not look at potential issues, that's on them.

[Delphinho123]

11 hours ago, lapal_fan said:

How about advise people not to borrow money they can't afford? 

I didn't overstretch my budget because I see year on year historic lows and think "well one day it'll go up and I'd be worse off".

I can't get over being sensible with money, only for idiots to borrow as much as they possibly can, at the time, to let them off because "we don't want to upset them".

They were thick enough to jump in two footed and not look at potential issues, that's on them.

So much ignorance in this statement. 

[Genie]

We’ve seen it in this thread, people talk about the current/new “high” interest rates and when will they return. 

They aren’t high, they were just stupidly low before. Many people banked on them staying low forever. 

[Ingram85]

It’s relative though isn’t it, 13% back then is different to 13% percent now based on wages compared to cost of living. 

People can barely afford it at 5-6%. 

Saying people need to look at their budget misses the point that even shithole run down places you wouldn’t house your worst enemy in are selling for £150,000 plus at the moment.

We had to settle for a small, ok-ish terraced house in an ok/meh area and that was £185,000. 

Your trad basic 3 bed semi that your parents could always afford years ago is now £250,000 plus and out of reach for most working class normal people. 

Edited October 12, 2022 by Ingram85

[lapal_fan]

26 minutes ago, Delphinho123 said:

So much ignorance in this statement. 

It was very insensitive to those in an unfortunate position, yes - I fully agree. 

My point is that I was given the option to borrow £120,000 MORE than I was already going to borrow, but my wife and I did some maths and we didn't want to NOT be able to afford future repayments IF interest rates went up, because they were low at the time.  We wanted to be able to do other things, like holidays, days out with our kids etc as well.  So rather than having a £1500 mortgage, we chose to stay at a budget of £700.  

My point is that whilst I chose to be more careful, other people clearly haven't been, and I can't be too upset that I did a sensible thing and they didn't, as harsh as that sounds.  

I agreed all this when our joint income was hovering around £55-60k a year and we're considerably better off than that now.  

I now feel - because of ridiculous house prices - that I can no longer feasibly look at moving up the ladder, because houses that would now be in my price range, are not.  And a large part of that is because people who don't earn the money I do, over borrowed to get those 4/5 bed houses at increased risk to their financial stability.  A house which was worth 350k two years ago is now pushing 450k..  So I'm DEFINITELY not borrowing that extra, meaning I'll stay where I am.

[Genie]

This goes back a bit, but goes to show even today 2.25% is historically very low.

Obviously the idiots we have in charge have spooked the market into pulling all decent value mortgages but I expect in a short period they will return. 5% for a 5 year fixed rate deal isn’t especially expensive imo. The issue is that people borrowed everything they could on a gamble rates wouldn’t revert back towards where they historically were.

Similar to @lapal_fan we could have borrowed much more than we did but realised the risk was too high should rates rise, or we lost a salary etc.

I said before, where I live it’s full of people in their early 30’s in fancy houses and leased Audi’s who I fear starting to panic.

Edited October 12, 2022 by Genie