Interest rates on the rise

[tedebear]

The problem with this country is the fixation of owning a home.

Lets get real no-one who has a mortgage really owns the home. When push comes to shove the bank owns it. You will only own it once the mortgage has been paid off.

The typical mortgage is 25 years (or longer), so for the majority of our adult lives we do not own the home.

And why do we feel so smug, when house prices rise and rise. It may make us feel richer, but you will never see that extra wealth unless you sell up move to a smaller home or use one of these equity release schemes.

The biggest problem this country faces, is the housing market. Cos when it crashes its gonna cause real problems

So why do we not rent? My grandfather privately rented his home for 40 years. He was still home proud, still cut the grass, still decorated it and still brought up a family.



Having said all of that I am a slave to mortgage

Renting is throwing good money away. Even with all your above points, each month you pay a mortgage you are returning some of the money to yourself. With rent - you're lining someone elses pockets!

We have a mortgage - and believe you me, we own our house. We're not over mortgaged, infact we probably own about 2/3rds of it. Its an investment, and also a pension fund, and also OURS, not the banks.

The housing market currently is far better than a bank, so thats where our money is. With a careful eye on the market, this'll give us a lovely retirement, and maybe in a couple of years we'll buy another place...

 

[Big Jim]

Glad to see you're not prone to over exageration.

Next time you see a house being sold with 66% discount, please let me know.

It's a hard job, but someone has to do it!

Ok, you're probably right 1/3rd was an exageration, but I still know plenty of people who got totally fu_cked over by it.

I remember seeing the prices dropping seriously, so I don't know how much, but it seemed a lot at the time.

 

[Uncle C]

With a careful eye on the market, this'll give us a lovely retirement

OK, this is obviously the answer to property investment - keep a cafeful eye on it and its bound to increase in price.

What do you do if the market crashes - move into a tent?

 

[withdeanwombat]

Been here,done all of this.

Bought a house in 80's boom,then couldn't live in it cos my work place changed,couldn't let it cos the building soc refused to let me,so saw it repo'd and sold by said building soc for 2/3rds what they said it was worth when they advanced the loan.Then got chased for the money I owed cos the resale price cost THEM money.

Me?I only lost 18 grand which i could not afford.

My current house is on a fix,and my gearing is great!

 

[Uncle Spielberg]

even at 5.75% interest rates are low, mortgages are still affordable at that level, the 6 x income is a misconception as that in itself is not a problem, yes lenders used to do 3 x in the early 90's but interest rates where 15% so 6 x at 5.75% is still a lot less per month

 

[Lokki 7]

The problem with this country is the fixation of owning a home.

Lets get real no-one who has a mortgage really owns the home. When push comes to shove the bank owns it. You will only own it once the mortgage has been paid off.

The typical mortgage is 25 years (or longer), so for the majority of our adult lives we do not own the home.

And why do we feel so smug, when house prices rise and rise. It may make us feel richer, but you will never see that extra wealth unless you sell up move to a smaller home or use one of these equity release schemes.

The biggest problem this country faces, is the housing market. Cos when it crashes its gonna cause real problems

So why do we not rent? My grandfather privately rented his home for 40 years. He was still home proud, still cut the grass, still decorated it and still brought up a family.



Having said all of that I am a slave to mortgage

Sorry to be smug, but lets say I bought a flat 7 years ago with a deposit of £30k and a mortgage of £200k. Rented said flat out at no cost to myself, and then put it on the market this month for £600k. Assuming I get done at that price and factoring in transaction costs thats a return of around 1,200% on my initial investment over 7 years. I've made worse investments.

 

[tedebear]

OK, this is obviously the answer to property investment - keep a cafeful eye on it and its bound to increase in price.

What do you do if the market crashes - move into a tent?

What the odds of a crash? What do you consider a crash? Like I said we own 2/3rds of our house (actually might be more), so enough buffer to withstand and kind of crash that would be likely. The 1990's crash took about £30k off the value of a £110k house. If that happened now, we'd still be ok.

Mortgaging to the hilt is never a good idea, but being sensibly mortgaged can also pay dividends in a reducing market, someone has to snap up all the bargains that will be coming onto the market!!

 

[Uncle Spielberg]

this is a stonking deal for re mortgages

5.44% fixed 5 years
No arrangement fee
Free survey
Free legals

Best by far of the 5 year deals on the market.

 

[Uncle Spielberg]

As long as demand outstrips supply by 5 x properties available prices will not fall with interest rates of 6%, rates will then drop at the end of this year/next year.

Don't panic captain Mainwaring.

 

[Big Jim]

All I know is that most first time buyer key workers can't afford housing.

A reasonable 4 bed detached house that I should be able to afford now costs £450 to £500K.


It's crazy. Who should we blame for this? A good ecomomy?

 

[sten_super]

All I know is that most first time buyer key workers can't afford housing.

A reasonable 4 bed detached house that I should be able to afford now costs £450 to £500K.


It's crazy. Who should we blame for this? A good ecomomy?

The problem comes from demand far outstripping supply. The vast majority of people want to buy a house; yet there simply aren't enough houses out there.

The housing boom has also created significant value in the rental market, so those that can afford (or already have) houses are then able to buy more than one house, and further restrict the supply of housing.

Any major fall in house prices has to come about through a fall in demand; either through lack of affordability (i.e. very high prices coupled with bad conditions for borrowing) or a genuine lack of interest in buying (as Diffbrook talked about). As the latter is unlikely, we have to hope for the former.

 

[Marshy]

this is a stonking deal for re mortgages

5.44% fixed 5 years
No arrangement fee
Free survey
Free legals

Best by far of the 5 year deals on the market.

i think im gonna get me a peice of that !

 

[Uncle Spielberg]

be quick

 

[Albion Dan]

US, our fixed mortgage is up in August, would you recommend going fixed again or riding the variable rollercoaster at current interest rates?


Might check what our pnalties are for breaking early to get a decent fixed rate now.

 

[Rougvie]

Sorry to be smug, but lets say I bought a flat 7 years ago with a deposit of £30k and a mortgage of £200k. Rented said flat out at no cost to myself, and then put it on the market this month for £600k. Assuming I get done at that price and factoring in transaction costs thats a return of around 1,200% on my initial investment over 7 years. I've made worse investments.

Exacamundo.

You cannot get a better investment than property, mate of mine who is on less than £30,000 just managed to get a £200,000 mortgage to buy a 2 bed flat rents out one room, and already he has had the flat valued at £230,000 within 8 months and away he goes on the property ladder to somewhere bigger and better.

There are far too many MUGS on average money who would rather whinge about not being able to afford a flat than grab the bull by the horns and do something about it. It can be done if you save a bit, get yourself decent credit history and do your homework, cant be arsed with doing any and you deserve to be a slave to some seedy landlord who is spending your hard eraned on hookers and coke

 

[British Bulldog]

So many people giving so much financial advice it confuses me

I think i'll just stick to liquidising my assets

 

[Uncle Spielberg]

US, our fixed mortgage is up in August, would you recommend going fixed again or riding the variable rollercoaster at current interest rates?


Might check what our pnalties are for breaking early to get a decent fixed rate now.

Dan

You could secure a fixed rate now and get an offer issued, The offer should last 3-6 months so it will be valid in August when your deal ends. I would go for a 2 year fixed rate myself. If you PM me I will send a quote.

 

[Uncle Spielberg]

don't forget 40% tax on profits on 2nd properties

 

[seagurn]

Less beer for me then best i top up now

 

[Muhammed - I’m hard - Bruce Lee]

Less beer for me then best i top up now