ender4 Posted September 28, 2022 Share Posted September 28, 2022 52 minutes ago, mottaloo said: I often wonder the same about that age group. For example, 2 women in my office (both 27) got married this year....fancy hotel weddings, elaborate hen and stag weekends....then where they live......both got 4 bed detached new build houses, all mod cons, each have two designer breed pets as well. Then there's the cars. Both lease mercs or BMW...one also has a motor bike for the other half AND a new VW camper van. Three holidays a year, then separate girls/lads breaks as well. But they must be earning pretty well to be able to afford even the deposit on the 4 bed detached house, plus the mortgage as a multiple of income? Maybe the husband makes a lot of money if their own job doesn't? Link to comment Share on other sites More sharing options...
ender4 Posted September 28, 2022 Share Posted September 28, 2022 3 minutes ago, sidcow said: I advised my son yesterday to never get a credit card as they are just too easy to run up bills on. people want stuff right now, they don't want to wait for anything. Or even better pay everything on a cash-back credit card and to quote Martin Lewis, pay it off IN FULL each month. It also teaches financial discipline if they can get used to that habit without over-spending. 1 Link to comment Share on other sites More sharing options...
mottaloo Posted September 28, 2022 Share Posted September 28, 2022 1 minute ago, ender4 said: But they must be earning pretty well to be able to afford even the deposit on the 4 bed detached house, plus the mortgage as a multiple of income? Maybe the husband makes a lot of money if their own job doesn't? Both on salaries of £30-£35k....admittedly I don't know what one of their other halves does, but the other is a carpenter. Mummy and daddy helped the dumb one out with a deposit for the house and the other one was frequently bailing her own parents out of the sh!t. It all heavily smacks of the "want it now" culture. If only 75% of what they prattle on about is true then they have to be stretched financially just so they can pose and keep up with their mates doing the same thing. Link to comment Share on other sites More sharing options...
Xela Posted September 28, 2022 Share Posted September 28, 2022 11 hours ago, Delphinho123 said: One of my family members just paid £12k to end their mortgage early and secure a new 5 year fix with Halifax. They were due to remortgage next December when it’s predicted interest rates will be close to 6%. These increases have spooked a lot of people. Folks are mortgaged up to the hilt with balances that are 4/5x their combined salary’s. Even a 1% increase in the base rate is unaffordable. Now add in the rising cost of energy, food, fuel etc. and all of a sudden you have a perfect storm to f*** a large percentage of the population. On the first point, people don't know what the rates will be next December. Pure speculation at the moment. Its changing from month to month. Its a bold move to cancel a deal 14 months early IMO. If it gives them peace of mind though, then maybe a price worth paying? 1 Link to comment Share on other sites More sharing options...
Xela Posted September 28, 2022 Share Posted September 28, 2022 3 hours ago, The Fun Factory said: Is it good for a pound of mashed up Dundee cake? I can imagine Buck Rogers taking a dump on that...in the 21st Century. 1 Link to comment Share on other sites More sharing options...
bickster Posted September 28, 2022 Moderator Share Posted September 28, 2022 3 hours ago, mottaloo said: I often wonder the same about that age group. For example, 2 women in my office (both 27) got married this year....fancy hotel weddings, elaborate hen and stag weekends....then where they live......both got 4 bed detached new build houses, all mod cons, each have two designer breed pets as well. Then there's the cars. Both lease mercs or BMW...one also has a motor bike for the other half AND a new VW camper van. Three holidays a year, then separate girls/lads breaks as well. One of them said to me that she really wanted what her parents have in respect of standard of home and all the accessories, flash TV, designer this and that. I said yeah, but they didn't start married life with all those things; they built up to it. She just shrugged; admittedly she ain't the sharpest tool in the box. She, her mate and many others are just so obsessed with image, it's bloody irresponsible. You've missed out a crucial bit of lifestyle info there. You can't judge people correctly without it... Spoiler How many sheds have they got? 3 Link to comment Share on other sites More sharing options...
sidcow Posted September 28, 2022 VT Supporter Share Posted September 28, 2022 25 minutes ago, bickster said: You've missed out a crucial bit of lifestyle info there. You can't judge people correctly without it... Hide contents How many sheds have they got? 2 Link to comment Share on other sites More sharing options...
wilko154 Posted September 28, 2022 Share Posted September 28, 2022 (edited) 13 hours ago, Delphinho123 said: One of my family members just paid £12k to end their mortgage early and secure a new 5 year fix with Halifax. They were due to remortgage next December when it’s predicted interest rates will be close to 6%. These increases have spooked a lot of people. Folks are mortgaged up to the hilt with balances that are 4/5x their combined salary’s. Even a 1% increase in the base rate is unaffordable. Now add in the rising cost of energy, food, fuel etc. and all of a sudden you have a perfect storm to f*** a large percentage of the population. Example. Last December I was paying 930 a month for my mortgage and 150 a month for my energy. This December coming I’ll be paying 1200 for my mortgage and 400 for my energy. It’s not easy to find 450 extra a month when you have three young children. Unless something drastic happens, I can’t see a future without a huge recession, house repossessions and people struggling to afford to even eat. Am I wrong? 11 hours ago, PieFacE said: My mortgage deal expires in March next year. Really shitty timing. Been speaking to my mortgage broker and he pretty much said there's not much I can do other than try and completely remortgage my house in November, leave the deal standing for a few months and compare the interest rate of whatever is offered in November against whatever it will be come March. But in no uncertain terms he stated to expect a massive increase in costs (shocker). He also stated that loads of people have been calling him in a panic cos they will be unable to afford their homes with an increased interest rate and general increase to cost of living, and lots are already putting their houses on the market. So will be interesting to see what happens with the housing market, i'm sure the rich will scoop up a few good deals. We're incredibly fortunate that my gf inherited a house from her grandad when he passed which she rents out, it's very very tempting to sell our current house and move in there and try and dip back into the market if it has a wobble. But with a baby, it all feels a bit too much. The one thing I would suggest is riding it out until the date you can remortgage, early if possible, and then fix but extend the length of term to the maximum (I think it's 35 years). Obviously you'll pay off less of your mortgage. But it will reduce your costs, and if you fix for 2-3 years you can re-evaluate then. It's a way of ensuring you can afford to live and ride out the storm and you can always adjust the length of term at the next remortgage. Edited September 28, 2022 by wilko154 Link to comment Share on other sites More sharing options...
Brumstopdogs Posted September 28, 2022 Share Posted September 28, 2022 Personally I would be wary of over-reacting to news. Less than a week ago a projection was this: https://capital.com/projected-interest-rates-in-5-years-in-the-uk Quote Analysts forecast that the BoE will continue to hike rates at least until December this year to cool expected rising inflation before taking a pause as high interest rates start to affect the economic growth rate. The BoE estimated the interest rate to peak at 3% in the third quarter 2023 before cutting it to 2.5% and 2.2% in the third quarter of 2024 and 2025, respectively. Now days later the headlines are about the base rate possibly going upto 6% in the future. Obviously there is a lot of unknown but personally I'd be surpised if they went that high in the next few years. Saying that though if you can get on a fixed rate deal that give you peace of mind then I would go for it! Link to comment Share on other sites More sharing options...
foreveryoung Posted September 28, 2022 Share Posted September 28, 2022 Didn't it go to 18.5% in the late eighties, you'd shit your pants wouldn't you if that was the case now. I think that was due to the markets though, not a government f*** up, so couldn't really do much about it. 1 Link to comment Share on other sites More sharing options...
markavfc40 Posted September 28, 2022 Share Posted September 28, 2022 8 minutes ago, Brumstopdogs said: Personally I would be wary of over-reacting to news. Less than a week ago a projection was this: https://capital.com/projected-interest-rates-in-5-years-in-the-uk Now days later the headlines are about the base rate possibly going upto 6% in the future. Obviously there is a lot of unknown but personally I'd be surpised if they went that high in the next few years. Saying that though if you can get on a fixed rate deal that give you peace of mind then I would go for it! You do realise a lot has happened since last week with the further huge acts of self harm by the government? Link to comment Share on other sites More sharing options...
Brumstopdogs Posted September 28, 2022 Share Posted September 28, 2022 (edited) 5 minutes ago, markavfc40 said: You do realise a lot has happened since last week with the further huge acts of self harm by the government? Yeah of course but it shows that in a space of a week things can change quick. The markets can over react to news. Hopefully things will settle down and although the rates will go up they won't go as high as is currently being forecast. Edited September 28, 2022 by Brumstopdogs Link to comment Share on other sites More sharing options...
ml1dch Posted September 28, 2022 Share Posted September 28, 2022 On 27/09/2022 at 16:06, OutByEaster? said: I have about a year left on my mortgage and my supplier wouldn't offer me a 'product' as with what I've got left I don't think it's worth their while. So I'm left on the standard variable rate, which seems like trouble - am I best piling money into it today to get it down as much as I can before a higher interest rate kicks in? It's not that it's not worth their while, it's that there isn't really a product to offer you. If the whole lot will be fully repaid in a year, and products start with a tie-in period of two years, then you can't take a product that is longer than your term. But also, if you only have a year left, it doesn't matter if your rate is 3% or 6%. The difference will be literally a few quid a month. 1 Link to comment Share on other sites More sharing options...
markavfc40 Posted September 28, 2022 Share Posted September 28, 2022 14 minutes ago, Brumstopdogs said: Yeah of course but it shows that in a space of a week things can change quick. The markets can over react to news. Hopefully things will settle down and although the rates will go up they won't go as high as is currently being forecast. I wish I could have an ounce of optimism mate but 12 years under this government have shown things never turn out to be better than expected or eventually get better. In fact the opposite is true. 2 Link to comment Share on other sites More sharing options...
bickster Posted September 29, 2022 Moderator Share Posted September 29, 2022 10 hours ago, foreveryoung said: Didn't it go to 18.5% in the late eighties, you'd shit your pants wouldn't you if that was the case now. I think that was due to the markets though, not a government f*** up, so couldn't really do much about it. You could only borrow 3 times your salary back then. It was tough but all possible. Now? Link to comment Share on other sites More sharing options...
delboy54 Posted September 29, 2022 Share Posted September 29, 2022 Can anyone give me a clear answer to the reason why years ago getting a mortgage was tied to your earning of 3 x salary, this "rule" was seemingly binned. It seemed a very sensible way of people being able to borrow "sensible" and affordable amounts and seemed to keep housing esp for first time buyers at affordable prices. This link of 3 x salary seemed to work well.....didnt it? Link to comment Share on other sites More sharing options...
Genie Posted September 29, 2022 Share Posted September 29, 2022 (edited) 14 minutes ago, delboy54 said: Can anyone give me a clear answer to the reason why years ago getting a mortgage was tied to your earning of 3 x salary, this "rule" was seemingly binned. It seemed a very sensible way of people being able to borrow "sensible" and affordable amounts and seemed to keep housing esp for first time buyers at affordable prices. This link of 3 x salary seemed to work well.....didnt it? Because the price of housing rose to a point many couldn’t afford to get on the ladder at 3x their salary. 3x an average annual salary is less than £100k. Options were to either peg the housing prices, or allow people to borrow more. Edited September 29, 2022 by Genie 1 Link to comment Share on other sites More sharing options...
Jonesy7211 Posted September 29, 2022 Share Posted September 29, 2022 8 minutes ago, delboy54 said: Can anyone give me a clear answer to the reason why years ago getting a mortgage was tied to your earning of 3 x salary, this "rule" was seemingly binned. It seemed a very sensible way of people being able to borrow "sensible" and affordable amounts and seemed to keep housing esp for first time buyers at affordable prices. This link of 3 x salary seemed to work well.....didnt it? I may be wrong on this, but in it's simplest terms wages have not grown at the same rate as the house prices increased. A lot of people would struggle to get on the ladder if all they could get was a mortgage of three times their salary. Link to comment Share on other sites More sharing options...
sidcow Posted September 29, 2022 VT Supporter Share Posted September 29, 2022 (edited) 19 minutes ago, Genie said: Because the price of housing rose to a point many couldn’t afford to get on the ladder at 3x their salary. 3x an average annual salary is less than £100k. Options were to either peg the housing prices, or allow people to borrow more. But if people were not allowed to borrow more than 3 x salary the house prices couldn't run away because who would buy them when they can't get mortgages? I think it was more banks loosening their own rules when rates were low because they realised people could afford higher payments......and they make more money. Prices can only increase if people have the means to pay for them. Edited September 29, 2022 by sidcow 2 Link to comment Share on other sites More sharing options...
delboy54 Posted September 29, 2022 Share Posted September 29, 2022 Thanks for the replies, its just that many years ago (last century!) I was earning an average salary of about 8K. So the max amount I was allowed to borrow was 3 x 8 = 24K so any house that I wanted to buy needed to be 24K or less unless I had some spare cash/saving to add to my purchasing power. I recall literally 50 or 60 details for affordable houses around that price range being sent to me by estate agents that I could afford per week! The point I am trying to make is that if the average salary lets say 30K now and the borrowing rules was still 3 x (so 3 x 30 = 90K) then currently suitable houses for first time buyers should be around 90 to 100 K. There seems to be a complete disconnect from earnings and how much the bank/building society is prepared to lend you. People on an average salary being given a mortgage of 5 or 6 times their salary just seems a recipe for disaster - as as happened some years ago and may happen again. After all if suddenly the borrowing "rules" changed from 3 time your salary ...to 6 or 7 times your salary then house prices will rocket.....and they have. Now even modest houses are insanely priced... My daughters and her friends are finding it virtually impossible to get on the housing ladder as are many, many young families.... When I become Sir Lord Derek of England I will make it illegal for people who own more than 2 houses. VTID 3 Link to comment Share on other sites More sharing options...
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