What might prevent a crash?

[user not found]

Are there any props left that could prevent a crash?

If they print money to bail out people we end up with inflation... Interest rate rises... People unable to pay mortgages...

I seriously can't think of any more props.

[jiltedjen]

loads of props left. 

the gov is actually paying people’s wages! that’s massive. 

it’s the start of a slippery slope. 

they will even go as far as sending cheques out (just like in America) 

it going to take a long long time until the average person doesn’t see houses as the number 1 wealth store in the UK

Everything they do will trash the value of the £ as we are reaching the competitive devaluation phase again, last time it was choked off as every country was doing it, this time they know they have to go big and go hard before anyone else does 

could wake up with 20% inflation overnight soon enough. 

those thinking of buying and holding off are looking at the new paradigm of ‘government will bail you out in any situation’ and piling in  

[winkie]

The government paying landlords the rents they can no longer collect directly.......then everyone will want to be a landlord, low interest rates, rents underwritten by the state, a risk free investment.😉

[skinnylattej]

There are two tricks left, return of Mortgage Interest Relief At Source (MIRAS), where you received tax relief on the interest on your mortgage, the other would be conversion of HTB from an equity loan to a grant. 

A nuclear option would be negative interest rate mortgages, whilst retaining all the interest rates at zero.

Given the effects on the currency, zero interest rates on everything could mean my house is worth £2,000,000, or 50,000 Euros, or $20,000.

 

 

[RomfordDon]

How can the market crash when people no longer have to pay there mortgage?

[zugzwang]

Let's be thankful for small mercies. Covid has somewhat limited the immigration numbers this year.

Obvs the Tory boys still have swathes of Hong Kong Chinese held in reserve.

[winkie]

3 minutes ago, RomfordDon said:

How can the market crash when people no longer have to pay there mortgage?

The ones that have an existing one perhaps if ask.......btlers only the interest to pay....... doesn't the debt get rolled over compounded possibly at a higher rate, tagged on the end?

£100000 @ 3% IO = £250 pm........many pay less than 2%.

Quite a few have decided they no longer want to be a landlord, a few hundred thousand than a few years ago.......nobody is forced to rent out property, they do it because they want to......choices.😉

[spyguy]

Everyones income going up 50%

Still wont help Lodnon/Se where wages need to double and HP need to halve.

UkBoE risks falling wrong side of the Fed tightening.

 

[captainb]

2 minutes ago, spyguy said:

Everyones income going up 50%

Still wont help Lodnon/Se where wages need to double and HP need to halve.

UkBoE risks falling wrong side of the Fed tightening.

 

Above assumes interest rates also return to 4 or 5%. Been waiting for that since 2008 

[captainb]

1 hour ago, Sausage said:

Are there any props left that could prevent a crash?

If they print money to bail out people we end up with inflation... Interest rate rises... People unable to pay mortgages...

I seriously can't think of any more props.

The recession might not be as biblical as people on here suggest. 

In the real world people are already back spending above pre covid. 

If you listened to people on here a couple of months ago that would never happen and every high street would collapse etc etc. 

Still expect a fall but collapses seem dreamworld based on available current data 

https://www.bbc.co.uk/news/business-53859148

[spyguy]

10 minutes ago, captainb said:

Above assumes interest rates also return to 4 or 5%. Been waiting for that since 2008 

No, not just base rates.

Its mortgage rates - SVR.

They are influecned by more than just base rates.

SVR are ~4% now.

Due to a reversal of  conditons i.e. China exporting deflation, you are going to see rates go up. BoE really has to follow the FED, whos rates basically  set the price of world money.

 

[captainb]

Just now, spyguy said:

No, not just base rates.

Its mortgage rates - SVR.

They are influecned by more than just base rates.

SVR are ~4% now.

Due to a reversal of  conditons i.e. China exporting deflation, you are going to see rates go up. BoE really has to follow the FED, whos rates basically  set the price of world money.

 

Very few people are on the SVR and SVR have gone down since the start of the year at most lenders. You can get a 90% mortgage on a 5 year fix for under 2% now. Thats mental. 

The FED has also slashed rates this year.. 

Yes they may rise, although last time they did the BoE didnt follow and both have said they expect rises to be slow and steady and top out at a lower than historical average. 

 

Nothing of course to mean rates couldn't shoot up. But to assume that will happen (as people have been saying since 2008) is falling into the what i want to happen rather than what is likely to trap 

[user not found]

So in a nutshell house prices could be propped up but everything else would go to sh#t. What a crazy world.

[spyguy]

9 minutes ago, captainb said:

Very few people are on the SVR and SVR have gone down since the start of the year at most lenders. You can get a 90% mortgage on a 5 year fix for under 2% now. Thats mental. 

The FED has also slashed rates this year.. 

Yes they may rise, although last time they did the BoE didnt follow and both have said they expect rises to be slow and steady and top out at a lower than historical average. 

 

Nothing of course to mean rates couldn't shoot up. But to assume that will happen (as people have been saying since 2008) is falling into the what i want to happen rather than what is likely to trap 

I think you are wrong.

Banks only offer low low mortgages on the assumption that they are going to cream more money later.

Tales of not begin able to remortgage are pretty common. last 10 years theres been regular 'mortgage prisoner' articles.

You have hoped that having a mortgage for ~10 years would allow you to get the the LTV well under 60%.

Apparently not in the days of 125% and IO mortgages.

 

 

Saying that, I would like to see some stats.

 

 

[captainb]

3 minutes ago, spyguy said:

I think you are wrong.

Banks only offer low low mortgages on the assumption that they are going to cream more money later.

Tales of not begin able to remortgage are pretty common. last 10 years theres been regular 'mortgage prisoner' articles.

You have hoped that having a mortgage for ~10 years would allow you to get the the LTV well under 60%.

Apparently not in the days of 125% and IO mortgages.

 

 

Saying that, I would like to see some stats.

 

 

Ive had 3 mortgages in my life and never had any issues whatsoever. Its your salary x 4.5 and the rate corresponds to those given based on the LTV and how long you want to fix. Always been in a job for over 6 months when applying. 

I suggest you chat to a mortgage broker it might dismiss some of the thinking.... 

 

[satsuma]

The banks charge about 1k for a lot of products, they are making money on that plus the interest which is a fair bit in the first two years, most people then take a new product with another arrangement fee and two more years of Payments being mostly interest.  Good scam if you can get it.  Really they should have to offer a 25 year fixed term product but don’t for various reasons including risk. 

[captainb]

3 minutes ago, satsuma said:

The banks charge about 1k for a lot of products, they are making money on that plus the interest which is a fair bit in the first two years, most people then take a new product with another arrangement fee and two more years of Payments being mostly interest.  Good scam if you can get it.  Really they should have to offer a 25 year fixed term product but don’t for various reasons including risk. 

Yep. You always need to add in those costs to compute and compare the actual rate on excel, as all are different. Can also make the 5 year fix more attractive 

The fact they are allowed not to present that critical information to you in an easy format is shoddy at best 

Payments arnt "mostly" interest if its a reaosnable term mind you. 

Edited August 22, 2020 by captainb

[spyguy]

8 minutes ago, captainb said:

Ive had 3 mortgages in my life and never had any issues whatsoever. Its your salary x 4.5 and the rate corresponds to those given based on the LTV and how long you want to fix. Always been in a job for over 6 months when applying. 

I suggest you chat to a mortgage broker it might dismiss some of the thinking.... 

 

x 4.5 is the max.

Banks also want some equity to protect their lending.

They use their surveyor not yours.

Remortgages failing on down valuation are very very common when people are borrowing to the max income multiple and LTV  and taking on long (30y) mortgage terms

https://www.mortgagestrategy.co.uk/news/brokers-grapple-with-down-valuations/

[satsuma]

4 minutes ago, captainb said:

Yep. You always need to add in those costs to compute and compare the actual rate on excel, as all are different. Can also make the 5 year fix more attractive 

The fact they are allowed not to present that critical information to you in an easy format is shoddy at best 

Payments arnt "mostly" interest if its a reaosnable term mind you. 

Looking at my setup I’d be paying a lot in interest even on a low rate fix, I reduce the term each time and try to pay it down but a lot don’t and therefore the banks are creaming it in 

[LetsBuild]

47 minutes ago, captainb said:

The recession might not be as biblical as people on here suggest. 

In the real world people are already back spending above pre covid. 

If you listened to people on here a couple of months ago that would never happen and every high street would collapse etc etc. 

Still expect a fall but collapses seem dreamworld based on available current data 

https://www.bbc.co.uk/news/business-53859148

Bit early yet, it’s still summer and furlough is still on. We need the dark nights to draw in and furlough ended to see the true damage.

[spyguy]

6 minutes ago, captainb said:

Yep. You always need to add in those costs to compute and compare the actual rate on excel, as all are different. Can also make the 5 year fix more attractive 

The fact they are allowed not to present that critical information to you in an easy format is shoddy at best 

Payments arnt "mostly" interest if its a reaosnable term mind you. 

I dont know who you are using but the fees and rates are very clear on mortgages.

 

[captainb]

1 minute ago, spyguy said:

x 4.5 is the max.

Banks also want some equity to protect their lending.

They use their surveyor not yours.

Remortgages failing on down valuation are very very common when people are borrowing to the max income multiple and LTV  and taking on long (30y) mortgage terms

https://www.mortgagestrategy.co.uk/news/brokers-grapple-with-down-valuations/

Im aware of all this. 

But back in the real world. 

-Vast majority (>75%) are not on the banks SVR. Some might still be on it as they had a lifetime base rate plus 0.5% deal from pre 08. Or just lazy. No sympathy for them.

-when remortgaging a drive by valuation is common if one at all. As long as your LTV isnt very high or its a flat with cladding they don't care 

-immediately post lockdown when there were no comparison prices surveyors were being cautious on new purchases and down valuing. Given the transactions going through now that seems to have stopped 

[captainb]

4 minutes ago, spyguy said:

I dont know who you are using but the fees and rates are very clear on mortgages.

 

Yes but 1k fee fix 2 years at 1. 5% gives a different cost to no fee fix at 1.7% for example. 

You need to self work out which is cheaper for you based on how much you are borrowing 

Edited August 22, 2020 by captainb

[spyguy]

11 minutes ago, satsuma said:

The banks charge about 1k for a lot of products, they are making money on that plus the interest which is a fair bit in the first two years, most people then take a new product with another arrangement fee and two more years of Payments being mostly interest.  Good scam if you can get it.  Really they should have to offer a 25 year fixed term product but don’t for various reasons including risk. 

Why on earth should they?

I was going  to point you to HSBC 10 year fixes. Theyve gone.

You can still fix for 5 years which gives you enough protection and scope to overpay the mortgage.

The problem comes from borrowing too much money at variable rates.

 

 

[spyguy]

4 minutes ago, captainb said:

Im aware of all this. 

But back in the real world. 

-Vast majority (>75%) are not on the banks SVR. Some might still be on it as they had a lifetime base rate plus 0.5% deal from pre 08. Or just lazy. No sympathy for them.

-when remortgaging a drive by valuation is common if one at all. As long as your LTV isnt very high or its a flat with cladding they don't care 

-immediately post lockdown when there were no comparison prices surveyors were being cautious on new purchases and down valuing. Given the transactions going through now that seems to have stopped 

It really depends.

And the bank really really do care - its theor money and the dont up another lenders crap lending - see the reluctance of other banks to get into HTB remortgages, most of which were Nationwide or HBOS originally.

https://www.mortgagestrategy.co.uk/news/htb-cuts-ltvs-to-60-in-frank-email-to-brokers/