Mortgages

[taio]

Nothing like the early 1990s the media are stirring things up, it'll reverse itself, the black hole with the furlough payments & the cost of the virus had to come from somewhere.

I don't think the comparison to the 90s is helpful. Different circumstances and it's about what happens now and the impact it has on people and families.

[RVclaret]

Anyone have any good and reasonably priced solicitors they could recommend? (for my house purchase)

[Big Vinny K]

Anyone have any good and reasonably priced solicitors they could recommend? (for my house purchase)

Are you Lancashire based ?

[RVclaret]

Are you Lancashire based ?

No - London area now, does that matter?

[Big Vinny K]

Oh and btw to say the media is stirring things up is as unhelpful to those struggling as harping back to previous times of hardship.

[Big Vinny K]

No - London area now, does that matter?

Would to me personally.
I was going to recommend Houldsworths (based in Clitheroe). I’ve used them a lot in last 5 years and always been very good.

[Lancasterclaret]

0.5% rise in interest rates is going to really hurt, and there is no guarantee that it won't go up again

The economists I follow twitter (both of the left and the right, and one lone Brexiteer) are a bit stumped

[Rick_Muller]

0.5% rise in interest rates is going to really hurt, and there is no guarantee that it won't go up again

The economists I follow twitter (both of the left and the right, and one lone Brexiteer) are a bit stumped

I think they are all trying to avoid the monumnetal Loxodonta that is present in the room (which I wont mention on here as it usually gets the thread closed as it is so bipolar and divisive).

Ultimately a lot of the commentary I have heard over the past few days refers to financial models generally work well based on the empirical data for the past 20 years or so, but then there have been blips and spikes recently and they proceed to list every one that can affect the financial stability of the UK such as the pandemic, Ukraine etc but one never (or almost never) is mentioned where anyone with a sane mind can identify it as being a massive factor for us in the UK.

That coupled with a sledgehammer approach (interest rate increases) to tackle inflation where a more surgical approach is more suited and necessary here (I don't have the answers though, I'm not clever or knowledgeable enough on the subject, just capable of taking a holistic viewpoint) I do fear that many will suffer hardship in the coming few years (which will perpetuate the ongoing right wing fascist viewpoint I might add regarding immigration etc)

anyway, what do I know, just a 50+ bloke who lived through negative equity land in the 90's and can remember it (where the estate I lived in experienced mass increase of suicides as a result), just hope it doesn't get that bad (but I think it will be worse!)

[JohnMcGreal]

UK national debt hits 100% of GDP, highest since 1961.

[jlup1980]

There's going to be a whole lot of people having sleepless nights over their impending remortgages and I don't envy them one bit.

Nobody has a crystal ball and if you fixed 2, 3 or 5 years ago there's no way anyone could have imagined what was going to happen during that term.

The BoE base rate was 1.25% twelve months ago. We all know the risks and in the perfect world we should try to factor in future increases, but most people are just trying to make ends meet as it stands due to the Covid fall out, high inflation and stagnant wages. The people of this country are being milked dry at the moment and repossessions will be commonplace.

Personally I have three years until my next remortgage and I dread to think where we could be at that time. My current rate is 1.19% and the idea of jumping to 6% is frightening. My repayments would go from less than £600 pcm to £1,000 pcm. That's simply not something I can afford to happen. We're a household of four and bills are high. I've been trying to overpay this mortgage since we took it out but energy and food has meant that this simply isn't possible. We're lucky to end the month on zero and we cut our cloth accordingly every month (I even cancelled Netflix!). Worrying times indeed.

[Lancasterclaret]

I think what is slightly more worrying is how the hell we get out of this?

[JohnMcGreal]

I think what is slightly more worrying is how the hell we get out of this?

IMF bailouts and begging Europe to let us join their club. Like the 1970s all over again.

[Big Vinny K]

There's going to be a whole lot of people having sleepless nights over their impending remortgages and I don't envy them one bit.

Nobody has a crystal ball and if you fixed 2, 3 or 5 years ago there's no way anyone could have imagined what was going to happen during that term.

The BoE base rate was 1.25% twelve months ago. We all know the risks and in the perfect world we should try to factor in future increases, but most people are just trying to make ends meet as it stands due to the Covid fall out, high inflation and stagnant wages. The people of this country are being milked dry at the moment and repossessions will be commonplace.

Personally I have three years until my next remortgage and I dread to think where we could be at that time. My current rate is 1.19% and the idea of jumping to 6% is frightening. My repayments would go from less than £600 pcm to £1,000 pcm. That's simply not something I can afford to happen. We're a household of four and bills are high. I've been trying to overpay this mortgage since we took it out but energy and food has meant that this simply isn't possible. We're lucky to end the month on zero and we cut our cloth accordingly every month (I even cancelled Netflix!). Worrying times indeed.

That’s a great post and a good summary of the situation many people find themselves in through absolutely no fault of their own.
Hopefully the 3 years you have to wait till the end of the your fix is going to see rates on their way back down. That’s what the economists are predicting long term with rates. The difficulty of course is that no economist predicted the pandemic or the war in Ukraine so let’s hope we don’t get another world wide shock.

Noticed that Ed Davey is highlighting his idea of a mortgage protection fund of up to £300 per month. It’s an interesting policy and whilst they won’t get in power it maybe that the Labour Party come up with something similar as a solution (or even in a coalition this is one of the ideas they adopt). If this was funded by a windfall tax on bank profits think this would be a popular and worthwhile policy. But it by no means solves everything and something more has to be done for renters and for first time buyers…..and most importantly in building more affordable houses.

The problems right now in our economy do appear overwhelming that whatever any party proposes to fix it will only scratch the surface. It’s incredible that after everything that happened with COVID and Ukraine that the sh-it storm that Truss caused has made things so much worse. It really was the last thing the UK needed and that woman has got to go down as one of the most arrogant and stupid people in the history of politics.

[fatboy47]

I am being punished for having to pay more for my milk and food in supermarkets by charging me hundreds more a month for my house.

Tory Britain

Wealth redistribution... Its the only game in town, and boy are they good at it.

And all passively voted for by folk with bugger all.

And the supposed party of the ordinary people have yet to propose a single significant alternative policy.

Best get used to it.

[Ashingtonclaret46]

Wealth redistribution... Its the only game in town, and boy are they good at it.

And all passively voted for by folk with bugger all.

And the supposed party of the ordinary people have yet to propose a single significant alternative policy.

Best get used to it.

How true is this! That's life and it has always been the case, just deal with it. It is never easy, nobody said that it would be.

[jlup1980]

IMF bailouts and begging Europe to let us join their club. Like the 1970s all over again.

This is exactly where we're heading. It's going to be one hell of a "I told you so" when we rejoin the EU on worse terms than we departed. I avoided Brexit in my previous post but all roads lead back to it unfortunately. It's legacy is simple - permanent economic damage.

[CrosspoolClarets]

Any handouts will fuel inflation further so that is a ‘no’, it is a rare thing Hunt will get right.

The bank has been slow out of the blocks which I’ve been predicting for over 10 years - inflation after QE was inevitable, even more inevitable after pandemic QE, and the banks models to predict it all and deal with it are infantile and wrong.

Personally I’d put interest rates up by 1% tomorrow not 0.25%. It will hurt some mortgage payers even more, but getting on top of inflation sooner will benefit them in return, and everyone else. Inflation is hurting them as a double whammy on top of mortgages. The severe pain cannot be avoided, it some cases it may mean needing to move home or going bankrupt, incredibly tragic but part of the economic cycle. We should avoid that if we can but I fear we cannot break natural cycles and should avoid making things worse for everyone.

Then need to get far more “supply” to get on top of inflation which to be fair is what Truss proposed (got a lot wrong too so I’m making this political or a Truss debate). Need more labour (either from outside or by “encouraging” our own to do more), more housing, more infrastructure, more growth (also, continuing to be non-political, it isn’t Brexit to blame either, core inflation is really high in Belgium, Sweden and many others too). This is about long term economic policy, whether inflation needs a short very sharp interest rate reaction and how to get growth surging and GDP per capita building. That is the way out of this. It always is.

P.s. disagree strongly with much of the above thread not because I don’t want to hell people but because it misdiagnoses and would make matters worse, Ed Davey especially.

[Swizzlestick]

Personally I’d put interest rates up by 1% tomorrow not 0.25%. It will hurt some mortgage payers even more, but getting on top of inflation sooner will benefit them in return, and everyone else. Inflation is hurting them as a double whammy on top of mortgages. The severe pain cannot be avoided, it some cases it may mean needing to move home or going bankrupt, incredibly tragic but part of the economic cycle. We should avoid that if we can but I fear we cannot break natural cycles and should avoid making things worse for everyone.

That would be economic suicide. It's not just homeowners affected by base rate increases, significant business borrowing is affected by it too. Also, why has such rapid rate increases in the last 12 months not touched inflation? What happens if you whack another percentage point on then nothing? You keep going?

[CrosspoolClarets]

(Help not hell in my last line of post above obvs, cannot edit apols)

[Lancasterclaret]

How true is this! That's life and it has always been the case, just deal with it. It is never easy, nobody said that it would be.

*just deal with it*

Thanks for tip

[Lancasterclaret]

Any handouts will fuel inflation further so that is a ‘no’, it is a rare thing Hunt will get right.

The bank has been slow out of the blocks which I’ve been predicting for over 10 years - inflation after QE was inevitable, even more inevitable after pandemic QE, and the banks models to predict it all and deal with it are infantile and wrong.

Personally I’d put interest rates up by 1% tomorrow not 0.25%. It will hurt some mortgage payers even more, but getting on top of inflation sooner will benefit them in return, and everyone else. Inflation is hurting them as a double whammy on top of mortgages. The severe pain cannot be avoided, it some cases it may mean needing to move home or going bankrupt, incredibly tragic but part of the economic cycle. We should avoid that if we can but I fear we cannot break natural cycles and should avoid making things worse for everyone.

Then need to get far more “supply” to get on top of inflation which to be fair is what Truss proposed (got a lot wrong too so I’m making this political or a Truss debate). Need more labour (either from outside or by “encouraging” our own to do more), more housing, more infrastructure, more growth (also, continuing to be non-political, it isn’t Brexit to blame either, core inflation is really high in Belgium, Sweden and many others too). This is about long term economic policy, whether inflation needs a short very sharp interest rate reaction and how to get growth surging and GDP per capita building. That is the way out of this. It always is.

P.s. disagree strongly with much of the above thread not because I don’t want to hell people but because it misdiagnoses and would make matters worse, Ed Davey especially.

You don't think that will cause even more damage?

[claret2018]

It’s a worrying time for sure. I think I got lucky in that I just moved house and got a mortgage agreed a couple of months ago, fixed for 5 years at 4.3%.

Yes it’s more than I would have liked but if I’d left it a month or two later I wouldn’t be moving.

[Swizzlestick]

EDIT - point made already

[Lancasterclaret]

And just to add to the above as now can't edit, it seems rather convenient to just write off the B word as being a major issue - especially by citing two countries that not only have lower inflation rates than us, but actively falling inflation rates.

I like Crosspool posts on here a lot, but he's never, ever, ever, ever, under any circumstances going to blame THAT for anything

[Claret3495]

Someone on the radio said yesterday his bank won't let him switch to an interest only mortgage, even if he pays the fee for switching, as he fails the affordability checks.

However his current tracker mortgage is hundreds of pounds more a month than the interest only mortgage would be, which he admitted was now unaffordable.

So how are they happy for him to pay the more expensive one that will end in disaster, but not switch to the cheaper one where they're still making hundreds in interest only?

He won't be the only one and the country will have an even bigger housing problem on its hands.

[Swizzlestick]

I like Crosspool posts on here a lot, but he's never, ever, ever, ever, under any circumstances going to blame THAT for anything

I've just seen their base rates are a couple of percentage points lower too. It's the elephant in the room and still people won't recognise it.

[Lancasterclaret]

https://inews.co.uk/news/politics/red-w ... rticle-top

Johnathon Gullis making his first ever good point (purely for his own electoral survival chances but still)

[JohnMcGreal]

I've just seen their base rates are a couple of percentage points lower too. It's the elephant in the room and still people won't recognise it.

We're trading with Europe on the same terms as Belarus so maybe we should see how they're getting along...

Their rate of inflation is down to 3.7% so maybe there's hope yet. Their interest rate is 9.5%, mind.

[taio]

https://inews.co.uk/news/politics/red-w ... rticle-top

Johnathon Gullis making his first ever good point (purely for his own electoral survival chances but still)

How would this help curb inflation? And presumably the main beneficiaries would be the highest payers of tax with the greatest property valuations.

[Rick_Muller]

I like Crosspool posts on here a lot, but he's never, ever, ever, ever, under any circumstances going to blame THAT for anything

The misconception that it only affected the UK is also a known "unknown". The rest of the EU may well have similar issues to the UK, but the single thing that could be the root cause for all of us it the "B" word.

[Lancasterclaret]

How would this help curb inflation? And presumably the main beneficiaries would be the highest payers of tax with the greatest property valuations.

I don't think it would help that at all, but IF they could tweak it to only benefit those really struggling with mortgage repayments then its not a bad idea

[Tribesmen]

This is exactly where we're heading. It's going to be one hell of a "I told you so" when we rejoin the EU on worse terms than we departed. I avoided Brexit in my previous post but all roads lead back to it unfortunately. It's legacy is simple - permanent economic damage.

It all comes down to one vote and you voted for it well 50.5% something like that .

[Lancasterclaret]

It all comes down to one vote and you voted for it well 50.5% something like that .

On here, and in Burnley in general it was a much higher percentage than that, and you can't blame them for it either (because of the failure of successive UK governments to invest in places like Burnley)

The issue was then would the government carry through what it promised for Burnley (and other regions)

The answer is a resounding "No" (which is sadly what a few of us on here predicted)

I just hope that whatever happens the north doesn't keep getting left behind because it can't continue like this

[Tribesmen]

On here, and in Burnley in general it was a much higher percentage than that, and you can't blame them for it either (because of the failure of successive UK governments to invest in places like Burnley)

The issue was then would the government carry through what it promised for Burnley (and other regions)

The answer is a resounding "No" (which is sadly what a few of us on here predicted)

I just hope that whatever happens the north doesn't keep getting left behind because it can't continue like this

LC you have to remember it's not only the UK that are having problems as housing is a world wide problem these days .
Here in Ireland we have 23 islands where they plan to house people for free is they have a family and are willing to stay for a year . Now great if you work from home the kids get to learn Irish as well .
It seems that most people want a 3 bedroom semi D and live in a city so island life is not for them .

[Lancasterclaret]

LC you have to remember it's not only the UK that are having problems as housing is a world wide problem these days .
Here in Ireland we have 23 islands where they plan to house people for free is they have a family and are willing to stay for a year . Now great if you work from home the kids get to learn Irish as well .
It seems that most people want a 3 bedroom semi D and live in a city so island life is not for them .

Suit me down to the ground that!

[dougcollins]

Anyone have any good and reasonably priced solicitors they could recommend? (for my house purchase)

I'd consider property conveyors as opposed to a solicitor, more specifically focused and often cheaper.

[Rick_Muller]

LC you have to remember it's not only the UK that are having problems as housing is a world wide problem these days .
Here in Ireland we have 23 islands where they plan to house people for free is they have a family and are willing to stay for a year . Now great if you work from home the kids get to learn Irish as well .
It seems that most people want a 3 bedroom semi D and live in a city so island life is not for them .

Where do I sign up! I work from home now, nothing stopping me

[Ashingtonclaret46]

*just deal with it*

Thanks for tip

My pleasure Lancaster, I wouldn't want you to give up just because of a bit of inflation.
Life goes on regardless, something I learnt over 70 years ago, nothing changes.

[Jakubclaret]

My pleasure Lancaster, I wouldn't want you to give up just because of a bit of inflation.
Life goes on regardless, something I learnt over 70 years ago, nothing changes.

It does, but let's just all catastrophize about things which may or may not happen & robustly be fixated on all the negatives.

[Lancasterclaret]

My pleasure Lancaster, I wouldn't want you to give up just because of a bit of inflation.
Life goes on regardless, something I learnt over 70 years ago, nothing changes.

Not sure you are really getting the severity of the situation for the mortgage holders here Ashington with all the respect in the world

[bfcjg]

As a nation we have gorged on cheap credit, government handouts to buy votes,pathetic politicians of all colours who are more interested in feathering their own nests, covid led to an over zealous lockdown and obviously the war isn't helping.
Until we build our industrial base up, get rid of the world/government owe me a living attitude we are knackered. Have we ever had an industrialist as pm ?

[Boss Hogg]

We have ‘gorged on cheap credit’ for too long. Was staggered to see that 93% of new cars are bought on finance. Car finance debt has increased by £29 billion in the UK since 2009. I’ve never seen so many luxury cars on the roads. These are often driven by younger lower earners. Many lifestyles of the need everything now generation aren’t affordable in a different economic climate and were never sustainable.

[Sproggy]

Noticed that Ed Davey is highlighting his idea of a mortgage protection fund of up to £300 per month. It’s an interesting policy and whilst they won’t get in power it maybe that the Labour Party come up with something similar as a solution (or even in a coalition this is one of the ideas they adopt). If this was funded by a windfall tax on bank profits think this would be a popular and worthwhile policy. But it by no means solves everything and something more has to be done for renters and for first time buyers…..and most importantly in building more affordable houses.

Would this also be payable to people who took out mortgages that they could afford, even if interest rates went up?

[CrosspoolClarets]

That would be economic suicide. It's not just homeowners affected by base rate increases, significant business borrowing is affected by it too. Also, why has such rapid rate increases in the last 12 months not touched inflation? What happens if you whack another percentage point on then nothing? You keep going?

We are only speculating because we don’t have an economic model in front of us.

But, my sense is that the rate rises were too slow and too low. That is why inflation has been sticky. The other problem is that we have hammered supply by underinvesting and being under productive for decades, made worse in the pandemic with early retirements galore and reducing hours. Then to compound this we boost demand by giving out too much free cash, much of it newly printed etc. The former is worse than many other countries and is one reason why interest rates hikes alone have not been enough and government (and Labour) are getting it wrong by talking about the wrong things.

My above post was talking about addressing both, growth policies coupled with demand curbing as a no half measures solution. The bit about the economic model, hence why I would disagree with the “economic suicide” point you made, is that my theory is that going high now means on a 10 year view rates are on average lower, benefitting people and businesses. There is also the inflationary element to consider, what I am concerned about are our total expenditure, not just the mortgage element, much of that is equally unavoidable. On a 10 year view those ordinary people like us end up paying more in total unless this is not addressed full on.

There are though some things I would do to support people further. There should be an automatic right to fix for 20-25 years, common in the US, at a lower rate (lets guess 3.5%). There should also be an automatic right to a means assessed repayment holiday (not all, some) when interest rates go above a certain level, to be spread over the rest of the loan. The banks should bear more of this risk and I’d put that into law. Starmer should be proposing that rather than just Tory bashing (which we can all do, and the duty of opposition os to propose sensible change not just making viral social media Tory bashing clips which is all he seems to do).

[Big Vinny K]

Would this also be payable to people who took out mortgages that they could afford, even if interest rates went up?

Don’t know the detailed policy but always better for it to be means tested
Just think the principle of some kind of buffer for protection against large increases paid for by the banks from their obscene profits is not the worst idea.

It’s ok the government saying there’s no money to help people with their mortgages but not sure what the difference is between that and help given for energy increases.

It’s a perfect storm for a lot of people at the moment.
If their overall expenditure was only going by 10% this would actually not be too bad and a big proportion of people could cope. But the increase in living costs especially for those on the lower pay scales is way way more than 10% in last couple of years.

Yet which companies are making record profits of billions of pounds ?
Banks
Supermarkets
Energy companies

Something is not right

[Sproggy]

I agree that if there is going to be anything, it needs to come from the banks. They sold the mortgage. It's a minefield for government to step in with mortgage top-ups.

Supermarket profits are falling - not sure they can shoulder too much of the blame (profits are still high however).

[Lancasterclaret]

This is a good explainer for inflation (using cucumbers!)

https://twitter.com/EdConwaySky/status/ ... 3220550659

[Quickenthetempo]

We can't control inflation because we buy 90% of everything from abroad.
They set the prices. If we don't buy other countries will.

We had chance to rebalance this after Brexit but the Tories messed it up like they do everything.

[Boss Hogg]

We can't control inflation because we buy 90% of everything from abroad.
They set the prices. If we don't buy other countries will.

We had chance to rebalance this after Brexit but the Tories messed it up like they do everything.

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

[Lancasterclaret]

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

Thats an informative thread?

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