[Finance] The Mortgage Market 2022

[Napper]

I don't suppose state pension would cover rental fees. In the not to distant future , there are going to be a lot of elderly people having to continue working to their dying day also a crisis with huge numbers of elderly being homeless . It will all be traced back to these times

 

[Uncle Spielberg]

As an old git, whose race is effectively run, can I ask the question to the NSC massive, on how is this situation going to pan out?

I bought my first house in 1992, 3 bedroom mid terrace in a nice part of Worthing (most of it is) for £48,500 when I was earning £14,000 PA, those houses now go for between £375/400k but wages clearly havent moved at the same rate.

Will we end up a nation of predominantly 'renters' with large numbers of landlords owning hundreds possibly thousands of properties, or is there still a yet unrolled out policy of whatever government to let the young people of this country have the opprinuty to own their own, affordable, homes?

Apparently, and no doubt I will be corrected if wrong, both Brighton and Hove and Worthing are two of the top provincal towns and cities were the average property price has the biggest percentage gap from the average wage.

Any landlord with a mortgage of over 50% ltv down here will have big issues going forward coming off a rate of around 2% to a new rate of around 6%, many will find their mortgage payments double or treble over the next year and may have the new mortgage payment being more than the rent achieved. They will have to pass that on, or sell

They will also have a problem re mortgaging to another lender due to new " stress " tests applied

 

[deletebeepbeepbeep]

At the age of 39 I am only now buying first house, a 2 bed flat near Preston park that needs _work_ doing. Have been incredibly lucky with receiving decent bonuses through the covid period and along with enforced no longer leaving the house managed to save enough for a deposit.

Of course I am buying it at it's highest value which it is unlikely to be seen again for several years, hopefully value gets back to where it was in 5 years, but anyway. The alternative is face spiralling rent. Damned if you do damned if you don't.

 

[Tom Hark Preston Park]

Any landlord with a mortgage of over 50% ltv down here will have big issues going forward coming off a rate of around 2% to a new rate of around 6%, many will find their mortgage payments double or treble over the next year and may have the new mortgage payment being more than the rent achieved. They will have to pass that on, or sell

They will also have a problem re mortgaging to another lender due to new " stress " tests applied

I have absolutely no idea what any of that analysis means - tho I'm sure that it will have a lot of meaning to a lot of people. Total respect to US for passing that analysis on, free of charge, to NSC.

US = one of the good guys

 

[Super Sub]

A couple of lenders have actually dropped their rates this week for existing clients looking for a new deal... 2 and 3 year deals are generally being offered too. The rate is generally higher than the 5 year offering though.

 

[Uncle Spielberg]

Yes edging back a bit from 6-6.5% to 5.5-6%, 2 year is more expensive than 5 year, tracker rates lower but a risk

 

[Super Sub]

Yes edging back a bit from 6-6.5% to 5.5-6%, 2 year is more expensive than 5 year, tracker rates lower but a risk

Nationwide now sub 5% for existing clients atm and of course subject to change and loan to value

 

[Uncle Spielberg]

Nationwide now sub 5% for existing clients atm and of course subject to change and loan to value

New norm maybe 4-5%

 

[Super Sub]

New norm maybe 4-5%

Lets hope so for our clients, family and friends sake. I'm hopeful that things will calm further in 2024 and that rates may drop even further in to the 3's. We shall see

 

[Titanic]

Any landlord with a mortgage of over 50% ltv down here will have big issues going forward coming off a rate of around 2% to a new rate of around 6%, many will find their mortgage payments double or treble over the next year and may have the new mortgage payment being more than the rent achieved. They will have to pass that on, or sell

They will also have a problem re mortgaging to another lender due to new " stress " tests applied

Are you talking about interest only mortgages? I thought they were going out of fashion?

If it repayment... then the capital is the major chunk of the monthly payment.

e.g. £200,000 at 3% over 20 years is £1109 a month, and at 6% is £1433

That isn't 'double or triple' it is about 30%.

 

[Uncle Spielberg]

Are you talking about interest only mortgages? I thought they were going out of fashion?

If it repayment... then the capital is the major chunk of the monthly payment.

e.g. £200,000 at 3% over 20 years is £1109 a month, and at 6% is £1433

That isn't 'double or triple' it is about 30%.

About 95% of buy to let mortgages are on interest only so a 2% rate to a 6% rate is treble the payment

 

[Tight shorts]

Are you talking about interest only mortgages? I thought they were going out of fashion?

If it repayment... then the capital is the major chunk of the monthly payment.

e.g. £200,000 at 3% over 20 years is £1109 a month, and at 6% is £1433

That isn't 'double or triple' it is about 30%.

Buy to Let mortgages are interest only in the vast majority of cases

 

[Titanic]

About 95% of buy to let mortgages are on interest only so a 2% rate to a 6% rate is treble the payment

Crikey - let's hope the house prices don't fall... or there will be a lot of people taking a severe haircut!

 

[Tom Hark Preston Park]

Crikey - let's hope the house prices don't fall... or there will be a lot of people taking a severe haircut!

Would be absolutely brilliant if house prices were to fall IMHO. Would mean that more people would be able to afford one, rather than live to work to pay some guy's mortgage

 

[Uncle Spielberg]

Lloyds are predicting a 8% to 16% fall in property prices over the next year

 

[erkan]

Lloyds are predicting a 8% to 16% fall in property prices over the next year

Have you got a link for that? Interview I saw suggested they were stress-testing 8% not predicting it.

With general inflation at 10%+ for consecutive years then house prices in nominal terms are unlikely to crash...

 

[BBassic]

Got a general advice question if anyone can answer:

My 1.99% mortgage is due to come up for renewal in 2024 by which time I'm hoping things will have calmed down a bit. In the meantime would it be advisable to divert my monthly savings into overpaying the mortgage as much as possible?

I've already got my "oh shit this unexpected calamity has happened" emergency fund so it seems like throwing additional money into that to just sit there could possibly be better served chipping away at the mortgage.

 

[jakarta]

3 per cent - the humanity...

Presume no-one on NSC was alive in 1979 when it was 17- yes 17 per cent - and somehow we all survived.

 

[erkan]

3 per cent - the humanity...

Presume no-one on NSC was alive in the 1979 when it was 17- yes 17 per cent - and somehow we all survived.

So smug and inaccurate.

 

[StonehamPark]

I'd really appreciate some advice if someone has a couple of minutes to advise.
Most likely a very noob question:

I'm 1.5 years into a 5 year fixed rate (1.9%) mortgage.
I put 10% down on a $315,000 property and my monthly payments are very affordable (thanks to the very low rate).
Of course I'm already anxious about renewal in 3.5 years, who knows that that landscape will look like in terms of rates.

I am very lucky (and thankful) to have a decent income (relative to my outgoings), and have the capability to increase my monthly mortgage payment, switch to bi-weekly payments, AND pay off a chunk of the mortgage ($10k this year, and next year, etc).

Should I be exercising this fortune to do just that, in order to slightly mitigate potential higher rates in 3.5 years time?

That might be a bit of a stupid question, but I honestly don't have anyone to ask for advice on this kind.
Cheers.