Friday, Jul 20, 2007
Desperate measures...
Times: Cut the cost of your mortgage
“The decision to raise the base rate this month will feel like another nail in the coffin for many borrowers, with very little breathing space since May’s rate hike,” “If you miss mortgage repayments, it will blot your credit history, and in the worst-case scenario your home could be repossessed.” “Renting out a room is one possible option to bring in money to help with the monthly bills,”... here we go, plenty of supply to flood the market
Posted by confused76 @ 01:55 AM (201 views) Add Comment
11 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. japanese uncle said...
If my understanding is right, people nowadays are carrying 200,000 pounds+ debt not always for four or five bedroom detached houses, but often for two bedroom flats, particularly in London. Then this ridiculous unworldly suggestion is clearly not the solution. Besides, what if your tenant is having a shower when nature calls you. A nightmare! I would rather rent a flat with perfect freedome to use my bathroom, than "own" a flat without it.
2. maddison said...
I would like much better statistics on the level of debt people hold as total figures are pretty meaningless. for instance what proportion of people on combined incomes of say £50k have debts in the order of £200k figure that gets bandied about all the time.
3. Scott said...
Japanese Uncle is right. It reminds me of when I was a student. I went downstairs half-asleep nude at 5am to get a drink of water and walked into a room full of people. One of the girls was clapping.
4. cyril said...
@ Maddison
I agree the sums might be a bit meaningless because incomes are so unevenly distributed, but presumably the average debt compared to the average income must tell you something?
If you do the sums, there is £1.3 trillion debt between about 60 million people. Take off the economically inactive, the over 60s and children, this figure must shrink to about 20 million or so? That's about £65,000 each or say £120,000 per household. What's the average household income? £30,000 ? Seems like a lot of debt to me.
5. maddison said...
OK that shows that multiples of income are 4 across the board of the ecomically active. BUT FTB's overall averages are showing only 3.5 x income!!
6. george monsoon said...
Maddison, as a potential FTB with a combined household income of just over 40,000
I would not risk borrowing more than 3.5 times the combined income out of common sense.
this would equate to borrowing a maximum of 140,000 - Can anyone work out what the monthly payments would be on a repayment mortgage at current variable rates? and I will let you know if I am in a financial position to afford to repay a debt of this size. in relevance to the article, I am probably a good example of what the average FTB in my area faces, with regard to taking on debt.
7. confused76 said...
I think the overall averages give a better than reality picture, since the moment you consider spread in the actual distribution of, eg, mortgage over annual income you find that there is a proportion of households in deeper shit (say borrowed 6x salary)
You want these households to crack, since house prices are set at the margins. I.e. forced sales of just 2% of current borrowers is enough to crash prices for everybody (think about what percentage of total housing stock is sold every year... small small number)
Add the knee-jerk reaction of the BTL punters... you see does not take much to crash the market
8. millard said...
George:
http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml
£140k over 25 years @ 8% = 1092.91 repayment or 933.33 IO
@ 12% = 1487.49 repayment or 1400 IO
9. also sold to rent said...
Almost 1500 quid a month, on a 40k income, to buy a small flat (which is just about all you'll get for 140k). Sod that! I have a similar income so I'll stick to my 900 quid a month rent for a house that's worth about 450k. No brainer IMHO.
10. Scott said...
140k for a flat. How funny. You must get some stupid lemmings in the south. Live in the north or the midlands, life is much better. You can have a house, be part of a safe community, not as much crime, things are cheaper, women are much more attractive and much less stuck-up, the roads are less congested, the air is breathable, English is by far the first language, the schools are safer, the streets are cleaner, very few gangs, very few guns, you can always find somewhere to park (at work and at home), the hospitals are cleaner, the police are not overstretched, people actually talk at the bus stops, cheaper for students, cheaper for the elderly.
11. uncle chris said...
Scott - stop encouraging them to head North, otherwise all those things you talk about will be gone. Let them carry on thinking that we are all grumpy, the weather is terrible (not far from the truth) and there are no jobs. You southern softies are better off staying in the home counties, and enjoying that 2 hour commute. Honest Guv ... Incidentally, just had our offer to rent a 3-bed 3-reception detached country house for £595 that would likely go on sale for £325,000 to £375,000. I'm so glad that rents bear no relation to the costs on buying places. An INTERST ONLY mortgage on £350,000 would set us back £1500 ... rising to £2200 after 2 years. Shows how out of kilter house prices are when compared to rents.