[Finance] What should the government do about the coming base rate mortgage hike time bomb?

[Mustafa II]

800,000 people up for renewal next year.

I personally know people who simply won't be able to afford the increase. They're ones of many I'm sure.

Tax breaks? Government subsidies? Or should they just allow the crisis to play out?

 

[beorhthelm]

don't see how that is saving anything. The object is housing for everyone and a system fair for everyone

I want a system where those struggling to get on the ladder, those who cannot afford high rents, those who are stuggling to get a mortgage, those struggling to keep up or have negative equity are supplemented by the profiteers, landlords, speculators, anyone with 2nd homes and of course the banks.

10 years ago labour and LIb dems proposed a Mansion Tax. Funny how at the time these policies receive widespread condemnation and as such those parties don't win power on these kind of policies or are rejected by the electorate, yet here we are suffering the effects of not regulating the housing and banking sector and creating a fairer system. A country run by Tory Bankers inflicting neo-liberalism ideology and we are left with sky high mortgage payments, sky high rents, sky high energy bills and rampant inflation

if we actually had neo-liberalism in charge, there would be a lot house building, and more open, cheaper housing market. a mansion tax just raises some revenue, it doesnt create any housing stock.

 

[Randy McNob]

People need to rent, people will always need to rent. There is, and I know I have a bias, and always will be a need for a rental market. Not all landlords are taking advantage of people, they are providing a service.

I actually don't understand your angle, you mention that 'speculators' inflate the housing bubble but you then talk about ploughing in to help to buy. I'm sure you understand help to buy would have precisely the same outcome. Is it that you want people to have homes to live in or is that you want everyone to be 'on the property ladder'?

depends on your definition of the housing ladder. Whether it simply means starting off with a small property based on your needs and getting bigger property as your needs change or whether you think it means borrowing as much as you can, buying bigger properties, sometimes 2nd or 3rd homes and gambling on the market increasing because you think that makes you wealthier.

Call me naive but i'm in the first camp

 

[mikeyjh]

depends on your definition of the housing ladder. Whether it simply means starting off with a small property based on your needs and getting bigger property as your needs change or whether you think it means borrowing as much as you can, buying bigger properties, sometimes 2nd or 3rd homes and gambling on the market increasing because you think that makes you wealthier.

Call me naive but i'm in the first camp

I don't think you're naive, I think you are correct. Buy a house if that's what you want, and can afford to do, live in it, enjoy it and if at some point in the future you need something different then worry about it then. I watch too many programmes around the housing market (Location, Homes Under the Hammer, all the high brow stuff), it's all about the "ladder" how to we make the next rung - Just love you house FFS.

 

[southstandandy]

Another interest rise on the way tomorrow. Oh goody.

 

[WATFORD zero]

Returning the original thread subject, expect more of the same tomorrow

How high will UK interest rates go?​

The inflation figures the UK reported on Wednesday were not just objectively bad, with prices rising just as fast as a month before. They also come at a supremely sensitive time, with the Bank of England meeting to decide interest rates and mortgage costs an issue of nationwide concern.

https://www.ft.com/content/07bd1198-555e-4f45-801f-113963960ef8

Why UK has western Europe’s highest inflation rates (clue: it’s mostly about Brexit)​

https://inews.co.uk/news/world/uk-western-europe-why-highest-inflation-rates-brexit-2426613

And sadly, in answer to the OP, absolutely no prospect of the Government doing anything about 'the coming base rate mortgage hike time bomb'

 

[Creaky]

Throughout this thread numerous posters have suggested that building more houses would be an answer to high house prices. I have no doubt that we need more dwellings and logic does suggest that by reducing the demand/supply ratio prices should fall.

However what hasn’t been considered is the question of who would build these houses.

From personal experience I can say that there appears to be a massive shortage of groundworkers, builders, electricians, plumbers plasterers etc. If you do find good and reliable workers I can assure you that their rates are definitely keeping up with inflation!

On top of this materials have increased phenomenally since Covid.

The budget for our new build has increased in the region of 40% since originally calculated at the end of 2020.

I just don’t see that building large numbers of cheap housing to solve the housing crisis is a viable option.

 

[beorhthelm]

Throughout this thread numerous posters have suggested that building more houses would be an answer to high house prices. I have no doubt that we need more dwellings and logic does suggest that by reducing the demand/supply ratio prices should fall.

However what hasn’t been considered is the question of who would build these houses.

From personal experience I can say that there appears to be a massive shortage of groundworkers, builders, electricians, plumbers plasterers etc. If you do find good and reliable workers I can assure you that their rates are definitely keeping up with inflation!

On top of this materials have increased phenomenally since Covid.

The budget for our new build has increased in the region of 40% since originally calculated at the end of 2020.

I just don’t see that building large numbers of cheap housing to solve the housing crisis is a viable option.

fair point.

 

[Randy McNob]

Throughout this thread numerous posters have suggested that building more houses would be an answer to high house prices. I have no doubt that we need more dwellings and logic does suggest that by reducing the demand/supply ratio prices should fall.

However what hasn’t been considered is the question of who would build these houses.

From personal experience I can say that there appears to be a massive shortage of groundworkers, builders, electricians, plumbers plasterers etc. If you do find good and reliable workers I can assure you that their rates are definitely keeping up with inflation!

On top of this materials have increased phenomenally since Covid.

The budget for our new build has increased in the region of 40% since originally calculated at the end of 2020.

I just don’t see that building large numbers of cheap housing to solve the housing crisis is a viable option.

Of course it does. You build new houses and all those local trades get a boost, those companies pay taxes, they create jobs, those people doing the jobs also pay taxes. It's oiling the wheels of the economy

 

[Creaky]

Of course it does. You build new houses and all those local trades get a boost, those companies pay taxes, they create jobs, those people doing the jobs also pay taxes. It's oiling the wheels of the economy

Those trades are already 100% occupied - there is very little if any spare capacity available.

 

[Randy McNob]

Those trades are already 100% occupied - there is very little if any spare capacity available.

and that's the justification for not building new homes ? OK mate

 

[dsr-burnley]

Throughout this thread numerous posters have suggested that building more houses would be an answer to high house prices. I have no doubt that we need more dwellings and logic does suggest that by reducing the demand/supply ratio prices should fall.

However what hasn’t been considered is the question of who would build these houses.

From personal experience I can say that there appears to be a massive shortage of groundworkers, builders, electricians, plumbers plasterers etc. If you do find good and reliable workers I can assure you that their rates are definitely keeping up with inflation!

On top of this materials have increased phenomenally since Covid.

The budget for our new build has increased in the region of 40% since originally calculated at the end of 2020.

I just don’t see that building large numbers of cheap housing to solve the housing crisis is a viable option.

The cost of actually doing the building is a relatively small part of an expensive house. Land prices are huge.

They sold new 3 bedroom houses in Colne for £175k including cost of land, demolition of the existing mill, and profit. The labour and materials would be easily afforded in more expensive areas.

Whether the builders are available to build them, that's a different matter. Perhaps a modern improved version of prefabs might be an answer.

 

[AZ Gull]

The cost of actually doing the building is a relatively small part of an expensive house. Land prices are huge.

They sold new 3 bedroom houses in Colne for £175k including cost of land, demolition of the existing mill, and profit. The labour and materials would be easily afforded in more expensive areas.

Whether the builders are available to build them, that's a different matter. Perhaps a modern improved version of prefabs might be an answer.

Spring Gardens Mill, by any chance? That was my workplace for a number of years.

 

[Seagull58]

From your situation it would appear you have no mortgage hence, all the rent you receive is profit, not sure if that is taxable in the UK but I would slap a 60% levy on that. That's not even considering you are taking money out of the UK economy

All the rent i receive is taxable in the UK and it is my ONLY UK income so falls within my tax-free allowance. I also pay it all out to rent a place to live in. You are in cloud cuckoo land.

 

[dsr-burnley]

Those properties (unless sold en-masse as a portfolio) should go onto the open market, correcting overheated house prices and allowing renting individuals onto the housing ladder, freeing up rental properties for those recently deprived.

In the longer term we must replenish the country’s social housing stock, so that we as a nation can’t be held to ransom by landlords in the future. I’m certainly not against the private rental market, but there must be a state backed alternative to it.

This could be done by building new properties, or by purchasing privately owned properties, such as those from landlords selling up, though I am not yet convinced that landlords are selling up to any significant degree.

Just how far would house prices have to fall before a single mother on minimum wage could afford to buy one? Not all tenants are young professionals struggling to raise a deposit.

If we want to reduce the private landlord market, we must have a proper safety net in advance for the tenants who have lost their homes.

 

[dsr-burnley]

Spring Gardens Mill, by any chance? That was my workplace for a number of years.

No, this one's Oak Mill on Skipton Road.

 

[Seagull58]

Private Properties are homes for people to live in, not for speculators to profit from which inflates the housing bubble.

Tax the shit out of anyone taking advantage of other people. While we're at it, windfall tax on the banks please. Plough it all back into help to buy and newbuild schemes.

The government bang on about levelling up, thats what I call levelling up

Your argument is utter nonsense. As I have explained, I bought a house, I lived in it, I paid off the mortgage, I moved abroad (for work) so I rented it out, I retired and continued living abroad, I pay approximately the same in rent where I currently live and my UK rental income is also taxable but i get no tax relief on the rent i pay.
My UK property is a home for somebody to live in, which is not me currently.

 

[BiffyBoy100]

Is the lack of housing or access to getting on the ladder a south / southeast thing? It's been talked about in this thread but does the midlands up have the same issue?

I purchased my first house in 2005 for 50k, but it was in Belfast... I was earning very little, and there's no way I could have got anything in the Sussex area (even with a dodgy Northern Rock mortgage) I moved to London 5 years later on a much better salary and had to live above a kebab shop in Brockley with 5 Africans.

I'd be interested to see the delta between salary / first buyer house prices in different areas of the UK (I'm sure it's flawed with all the Archibald and Hugo's parents lending a hand in London)

 

[Creaky]

and that's the justification for not building new homes ? OK mate

Have you actually read what I’ve posted before replying in such a manner?

I have simply posed the question that if it were decided to build more houses than we currently are then who would be doing the building?

 

[chickens]

Just how far would house prices have to fall before a single mother on minimum wage could afford to buy one? Not all tenants are young professionals struggling to raise a deposit.

If we want to reduce the private landlord market, we must have a proper safety net in advance for the tenants who have lost their homes.

It’s rare that I find myself in agreement with you, but yes, this would be vastly preferable.

Our current predicament is entirely due to the needless sting in the tail of the (otherwise excellent) original “right to buy” Conservative policy, which prevented local authorities from using the funds generated from selling social housing to build replacement stocks.

While I understand that the rules around this have recently been changed, permitting local authorities to now build social housing, there’s almost a 40 year gap in which our social housing stock has been pretty well decimated.

That needless clause in the policy has doomed several generations to sky high private rents, with an alternative of homelessness.

 

[nicko31]

Markets seem to pricing on a 6% base rate now, fixing in the 7's look a real possiblity. Labour's idea of forcing banks to allow mortgage holidays to interest only seems reasonably sensible if certain criteria are met, we don't want mass defaults