MattW

As title

davegtt

to be expected thou

ProperCharlie

so what will the typical SVR be now? just want to know if i'm getting value from my 5 year fixed deal (4 years left).

Graz

Excellent news, well it is for me

GaryK

good news if it finally starts to make an impact on the vastly over-inflated house prices that *still* seem to be with us.

Gary
(jumped off the property ladder and still not sure it was the best decision!)

salsa-king

0.25% on a £60k mortagage... is £12 a month isn't it?
god help us if it goes up 1%

Corgi

IMO it wasn't.

It won't make any difference, just this afternoon I sold a house for £249,000 to an investor, I paid £144,000 for it 7 months ago

Tiggs

makes no difference- anyone off the ladder thinking this is going to help them is off their head let alone the ladder!

P1Fanatic

Ah thats ok as just took out a 3yr fixed on my first house.

Simon.

salsa-king

high house prices.. puts new buyers off as they can't afford the repayments.
basic new starter home £100k??? (nottm area) what early 20yr old can buy that on their own... even if they earn £20k a year (not that they probly do) £20k x 3 = £60k mortagage... so how do you find the extra £40k?

intrest rate increase will not reduce house price to make ppl aford them...nor will it make ppl buy their house.

MadGrip

I think its mostly to do with supply and demand, as theres not enough houses for the people who want them, so no matter what the interest rate (within reason) house prices aint going to stop rising much.

I think it will hit our exports Very hard though

Phil

Graz

Never been on the ladder, and now can't get on the ladder, that's the flippin problem

davegtt

well an interest rate rise isnt going to help too much for you then is it? (going on the first post in this thraed by yourself)

Graz

Well it helps my savings towards a deposit grow. Hopefully one day the rises in the house market will slow and eventually it will all meet in the middle.

In fairness I could get on the property ladder (and should have done ages ago, doh! )but I don't want a starter home, i.e. some thin walled terrace effort where I have to listen to nextdoors TV, Hi-Fi, baby, etc. I had enough of that from renting flats for the last eight years. It's not as though I don't get paid very well, quite the opposite in fact, but still can't afford the place I want.

SD

My thin walled, starter home effort is now worth double what my brother and sister in law paid for their similar home 4 years ago, but what's frightening is that despite being 'on the ladder' the house we'd like is even further away now than it ever was at about £225k.

Know exactly how you feel.

Simon.

imlach

The problem is, most people can never afford the place they want You can't start at the top! I can guarantee that if you decide you have £300k to spend, there'll ALWAYS ALWAYS ALWAYS be somewhere that is £350k which you wish you could stretch to.....but if you had £350k, there's always the placeat £400k that captures your heart.....it's endless

The majority start off with somewhere they can afford, and capital growth and pay rises help them to climb the ladder.

I have a 4 bed detached house with garage & garden in nice area, but I still want more! I want a bigger garden, a bigger kitchen, a bigger garage, bigger rooms, more features, etc etc....

I can't afford the place I want YET, but being on the property ladder, and having buy-to-lets as well sure as hell helps me get there a lot quicker than NOT being on the property ladder.

You've got to be in it to win it as they say

imlach

Also, those that are waiting for house price inflation to cool - yes, it may well do, but you have to take a longer term view....house prices over the last 25 years have outperformed most other investment products.

Also, with low interest rates still, and house price inflation still running at 10%, compounding this over the next year or two (even with the two figures coming closer), your savings are still going to stay WELL behind what house prices are doing....

Remember, the last crash in 1990 era happened when interest rates were 12-15% and people struggled with the repayments - hence enhancing the crash as people got repossessd. With interest rates still comparitively low compared to the 25 year average, AND with people taking fixed rates, not so many will require to be repossessed this time around....hence the crash will be softer.

Look at all those 2 years ago who sold their family home in hope of a crash around the corner - they must be 20% at least away from even getting the SAME house they sold now.....gained a few % on their savings, AND had to shell out on rent.
Oops.

Yes, now may not be the MOST IDEAL time to buy a property, but I do think you need to look longer term over 10-15 years. You'll still win.

Goochie

... and I dont think anyone believes there is a "crash" around the corner. Certainally not this year.

Faire D'Income

House price inflation has been running at about 2-3% per annum as an average, whereas equities have returned around 7% but both are highly cyclical so its a case of caveat emptor.


And do you also remember how various commentators repeatedly kept talking up the market, until one fine day in August it all suddenly went quiet? Although the fiscal dynamics are different, there are similarities in the market of now compared to the late '80s especially the insistence of vested parties talking up the market, some ludicrous mortgage offers at the moment (5-6 times income multiples) plus rising interest rates. What has propped up the markets in many areas recently has been the irrational exuberance of the BTL market. We haven't added to our portfolio for 14 months due to the stupidity of people entering the market and forcing prices up without even trying to negotiate with the vendor - it beggars belief!

At present you are correct but wait for a correction in the market and once prices have dropped by 20-30% then those people will start to look decidedly clever. Once the rest of the country catches up with the South East, then its time to bail out in my opinion especially when you consider the returns some areas give that will not work out financially in the short term.

Around here, I can get circa £620 per month on a one bedroom, purpose built flat costing £120,000 and yet I can pay the same amount in Warrington or Northampton for example and receive a significantly lower rent - it doesn't add up when people are paying these prices for BTL. They'll get stung when interest rates start hitting 6.5% plus.

At least there will be some bargains again in a year or so....

Petem95

Even if prices do crash, the first time buyer stuff wont be hit hard at all due to the lack of small properties, and increasing amounts of people wanting this kind of property.

Cant see any sort of crash happening for at least 18months though really. Maybe when people who have big fixed rate mortgages end their fixed-rate period and find their payments a bit too hard to keep up with, and at the same time all these thousands of extra homes which are ment to be being built start coming onto the market and increasing supply.

salsa-king

I bought a NEW 2 bed semi in 1996 (a starter home) paid £36k... which was a little bit more than the 3xannual earnins i had... but as i had 10% deposit the B&B loan me the short fall.. all £2k of it!!
That house is now £95k............ in only 8yrs!
better than money in the bank.

I rented it out tho.

3yrs ago i bought a Studio Aparment in Nottm City Centre (not a posh place) paid £13800.
last year i bought another Studio Flat directly under the 1st one i bought... had to pay £25k for that!!!
BUT this week there is a similar Studio for sale in the same block.. and they are wanting £59950

its good for me as my two flats are about £120k between them.
what i'm getting at is that low income ppl can't now afford even these basic Studio Flats!! if a person were on £15k a year.. they'd only get about £45k mortagage!

what/how do ppl buy a house these days?


I've been lucky.. bought a good prices... and still live at home

imlach

Are you sure house prices are only 2-3% per annum?
For instance, my parents house is worth 40 times what they paid for it 30 years ago. That's more than 2-3% per annum. That is by no means unusual.

I'd agree with you here though. Last BTL for us was 2002. Know of people who are STILL buying into BTL, using interest only loans in new devs where 90% of rest of new dev is BTL etc etc - they are stupid - now struggling to rent them. Silly people. They need ALL the rent for the interest only mortgage - so if they have a void, they are f**ked!

ProperCharlie

i agree with imlach. 3 years ago i was saying that the market would correct, and put off moving. i year ago i couldn't be *rsed to wait anymore, and so moved. the place that i sold had got up by almost 300% in the 6 years that i had it. the place that i bought has gone up considerably in the last year. if the market does crash, i doubt the value of this place will get below what i paid in any case. even if it does - i'm looking at the long term so it won't really bother me much.

2 things that have served me well:
never be tempted to release equity from your house.
get a long term fixed rate if your mortgage is a significant proprtion of your income.

if you think long term, you can't go too far wrong. it's generally people who want to make a killing overnight who can come unstuck.

tiggers

Ah yes the glorious Thatcher years! Don't worry ,vote Tory and these days are just around the corner

Faire D'Income

As an average, yes. But remember that those are compounded and take into account price decreases such as the mid- seventies and late eighties as well as massive positive gains such as the last eight years.

As you say, voids need to be taken into account and your whole approach should be pessimistic and yet I see folks with massive gearing on relatively few properties thinking the golden times are here to stay.

imlach

Yes, but I have taken compounding into effect. Looking back over 30 years is not exactly a short term view.....and 40 times value over 30 years is FAR more than 2-3% per annum over 30 years.

imlach

ie,

If a house was worth £10k in 1974, 3% growth every year since then would be £23.5k today.

Yet I know for a fact that a £10k house 30 years ago is now worth £400k.

That's more like 13-14% per year. That WAY outperforms the 7% on equities (I assume you mean the FTSE).

ProperCharlie

example: my mother bought her place in 1979 for £30,000. Sold it in 2003 for £940,000. £30k invested at 5% p.a over the same period would only have reached £97k, according to my calculations.



(or £151k at 7%)

Daz34

****

salsa-king

bluudy hell.. where was that house in 1979 @£30k?
when the 'ordinary man's' house was about £15k