Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted October 30, 2021 Share Posted October 30, 2021 Interesting to see a second peak in housing market activity as the stamp duty holiday was wound down in September - the madness of crowds and all that. Rishi knew what he was doing, and the great British public (a reflection on bad education I guess) played along. I was expecting a major September peak and they delivered. The issue now is... no stamp duty holiday coupled with rising interest rates either in Nov or Dec... oh dear. That said, those who were fired up into buying a house by the stamp duty holiday will no doubt proceed with their purchases, so October will be a busy month also. November? If there's an interest rate rise, however small... things will change fast. Quote Link to comment Share on other sites More sharing options...
oatbake Posted October 30, 2021 Share Posted October 30, 2021 51 minutes ago, gruffydd said: That said, those who were fired up into buying a house by the stamp duty holiday will no doubt proceed with their purchases, so October will be a busy month also. November? If there's an interest rate rise, however small... things will change fast. I thought you had to complete by the end of September to secure the stamp duty discount? Quote Link to comment Share on other sites More sharing options...
Si1 Posted October 30, 2021 Share Posted October 30, 2021 1 hour ago, oatbake said: I thought you had to complete by the end of September to secure the stamp duty discount? You did. Quote Link to comment Share on other sites More sharing options...
Pmax2020 Posted October 30, 2021 Share Posted October 30, 2021 I’ve not seen much activity around the areas I’m interested in. The number of properties coming into the market is very low but the prices are still daft. Sadly they all see to sell regardless! Quote Link to comment Share on other sites More sharing options...
househunter123 Posted October 30, 2021 Share Posted October 30, 2021 Half decent homes selling quick here in the East Midlands. Two beds pre pandemic are now worth three beds. Greedy estate agents trying it too and adding thousands too homes. Decent offers I'm putting in getting rejected. Still renting, getting more depressing by the day . Quote Link to comment Share on other sites More sharing options...
cy23 Posted October 30, 2021 Share Posted October 30, 2021 Assuming that interest rate hikes do cause some deleveraging. Is it possible that the banksforeclose them but keep the properties as assets and rent them out? Quote Link to comment Share on other sites More sharing options...
btd1981 Posted October 30, 2021 Share Posted October 30, 2021 (edited) Will interest rate rises cause prices to fall? I think it's been hypothesised that provided mortgage repayments remain 'affordable, then it could create an inflationary pressure, because people don't want to wait for rates to get higher still (house prices couldn't possibly fall, apparently...) So until rates become prohibitive, all bets are off? Edited October 30, 2021 by btd1981 eh eh ehhhh Quote Link to comment Share on other sites More sharing options...
Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted October 30, 2021 Author Share Posted October 30, 2021 38 minutes ago, btd1981 said: Will interest rate rises cause prices to fall? I think it's been hypothesised that provided mortgage repayments remain 'affordable, then it could create an inflationary pressure, because people don't want to wait for rates to get higher still (house prices couldn't possibly fall, apparently...) So until rates become prohibitive, all bets are off? Basically, yes - it impacts affordability for one thing. https://www.cnbc.com/2021/09/29/mortgage-demand-falls-as-rates-rise-to-highest-level-since-july.html Quote Link to comment Share on other sites More sharing options...
captainb Posted October 30, 2021 Share Posted October 30, 2021 1 hour ago, cy23 said: Assuming that interest rate hikes do cause some deleveraging. Is it possible that the banksforeclose them but keep the properties as assets and rent them out? Hike from 0.25% to the lofty highs of 1% causing foreclosure? Alright then... Quote Link to comment Share on other sites More sharing options...
cy23 Posted October 30, 2021 Share Posted October 30, 2021 1 hour ago, captainb said: Hike from 0.25% to the lofty highs of 1% causing foreclosure? Alright then... Who said we stop at 1%? Quote Link to comment Share on other sites More sharing options...
TheResponsibleHouseBuyer Posted October 31, 2021 Share Posted October 31, 2021 7 hours ago, Pmax2020 said: I’ve not seen much activity around the areas I’m interested in. The number of properties coming into the market is very low but the prices are still daft. Sadly they all see to sell regardless! Given the low supply of homes on the market, if the rates go up, i can still see prices continuing to go up. The seller will just put their prices up relatively in line with everyone else in the country and this will just have a domino effect of what we are seeing. The demand will always be there. Given the lack of supply, buyers will just take whatever they can. All the "free" money floating around the past year, combined with low interest rates means people have saved considerably. If patterns remain the same e.g. working from home, not going out as much then i can see a lot of people with £ to put towards housing. In some areas I am seeing more new builds listed than older homes, and sometimes going for even cheaper! Which i am sure has never happened before. I am pretty sure that a lot of mortgages have been taken out on the low interest rates and fixed for as long as possible. Any changes to inflation or interest rate rises will be limited. Cant see supply going up anytime soon, something always gets in the way of it. I think for now its, seller has a home to sell, has a buyer but cant find anywhere to buy. Interest rate rise has to be significant enough that has a significant impact on first time buyers' affordability, thus affecting the bottom of the chain to bring prices down. Quote Link to comment Share on other sites More sharing options...
Pmax2020 Posted October 31, 2021 Share Posted October 31, 2021 I find myself scratching my head a lot. The wife and I have good jobs, decent savings, and no debt other than a modest mortgage. We’ve accrued a good amount of equity yet as I approach my 40s I struggle to see how friends and colleagues my age are managing to buy houses that are 400k-450k. Some bought later than us! I look at the cost of these mortgages and in particular how precarious they are were rates to rise, and I can’t work out how people have the balls to sign on the dotted line. I suppose in a year or two when the wife returns to full-time hours, we could just devote her entire wage to a mortgage and council tax so we can have a 500k house like the rest of the muppets. Its tempting. We’d need a couple of German cars for the driveway too though. Quote Link to comment Share on other sites More sharing options...
Si1 Posted October 31, 2021 Share Posted October 31, 2021 8 hours ago, TheResponsibleHouseBuyer said: Given the low supply of homes on the market, if the rates go up, i can still see prices continuing to go up. The seller will just put their prices up relatively in line with everyone else in the country and this will just have a domino effect of what we are seeing. The demand will always be there. Given the lack of supply, buyers will just take whatever they can. All the "free" money floating around the past year, combined with low interest rates means people have saved considerably. If patterns remain the same e.g. working from home, not going out as much then i can see a lot of people with £ to put towards housing. In some areas I am seeing more new builds listed than older homes, and sometimes going for even cheaper! Which i am sure has never happened before. I am pretty sure that a lot of mortgages have been taken out on the low interest rates and fixed for as long as possible. Any changes to inflation or interest rate rises will be limited. Cant see supply going up anytime soon, something always gets in the way of it. I think for now its, seller has a home to sell, has a buyer but cant find anywhere to buy. Interest rate rise has to be significant enough that has a significant impact on first time buyers' affordability, thus affecting the bottom of the chain to bring prices down. There has to be a trigger to pop the bubble and the BoE will try not to provide that trigger. But of course we don't really know whether nudging IRs up just a little bit won't do that. Quote Link to comment Share on other sites More sharing options...
winkie Posted October 31, 2021 Share Posted October 31, 2021 5 minutes ago, Pmax2020 said: I find myself scratching my head a lot. The wife and I have good jobs, decent savings, and no debt other than a modest mortgage. We’ve accrued a good amount of equity yet as I approach my 40s I struggle to see how friends and colleagues my age are managing to buy houses that are 400k-450k. Some bought later than us! I look at the cost of these mortgages and in particular how precarious they are were rates to rise, and I can’t work out how people have the balls to sign on the dotted line. I suppose in a year or two when the wife returns to full-time hours, we could just devote her entire wage to a mortgage and council tax so we can have a 500k house like the rest of the muppets. Its tempting. We’d need a couple of German cars for the driveway too though. The simple fact is there will be fewer younger people, moving, buying or renting homes privately.......fewer partnering up when it will not take much for a financial downfall, a breakdown of relationships, a division ( not unlike brexit).....More employers will have to help out with housing to get the staff, like the armed services, religious organizations, like nursing once did...... families will have to pull together, support each other and pool resources. Quote Link to comment Share on other sites More sharing options...
dpg50000 Posted October 31, 2021 Share Posted October 31, 2021 20 hours ago, gruffydd said: Interesting to see a second peak in housing market activity as the stamp duty holiday was wound down in September - the madness of crowds and all that. Rishi knew what he was doing, and the great British public (a reflection on bad education I guess) played along. I was expecting a major September peak and they delivered. The issue now is... no stamp duty holiday coupled with rising interest rates either in Nov or Dec... oh dear. That said, those who were fired up into buying a house by the stamp duty holiday will no doubt proceed with their purchases, so October will be a busy month also. November? If there's an interest rate rise, however small... things will change fast. Not gonna happen. Or if it does, it will be one and done, then reversed as soon as the markets throw a tantrum. Quote Link to comment Share on other sites More sharing options...
Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted October 31, 2021 Author Share Posted October 31, 2021 3 hours ago, dpg50000 said: Not gonna happen. Or if it does, it will be one and done, then reversed as soon as the markets throw a tantrum. No that is not how financial markets work these days... the pressure comes from without and shifts domestic policy much of the time... so there will be no reverse. There is one trajectory right now and it's IR's up and mortgage rates up. Quote Link to comment Share on other sites More sharing options...
Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted October 31, 2021 Author Share Posted October 31, 2021 4 hours ago, Pmax2020 said: I find myself scratching my head a lot. The wife and I have good jobs, decent savings, and no debt other than a modest mortgage. We’ve accrued a good amount of equity yet as I approach my 40s I struggle to see how friends and colleagues my age are managing to buy houses that are 400k-450k. Some bought later than us! I look at the cost of these mortgages and in particular how precarious they are were rates to rise, and I can’t work out how people have the balls to sign on the dotted line. I suppose in a year or two when the wife returns to full-time hours, we could just devote her entire wage to a mortgage and council tax so we can have a 500k house like the rest of the muppets. Its tempting. We’d need a couple of German cars for the driveway too though. It's called marketing and the banks are very good at it. I applied for a mortgage the other day to see how much I could get (over 500,000 as it happened) - there is no way it is affordable. Nor do I work in a sector offering much stability (and I'm on a probationary period. There isn't due diligence from either the lender or the borrower much of the time... the expectation being the government will step in. It almost reached a point that the government couldn't during the last financial crisis - the next will probably be the point the governments/central banks in the west do lose control... China must be laughing right now. Quote Link to comment Share on other sites More sharing options...
Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted October 31, 2021 Author Share Posted October 31, 2021 22 hours ago, oatbake said: I thought you had to complete by the end of September to secure the stamp duty discount? You do, but those who failed to hit the deadline have been sucked in, much of the time - and will proceed with purchase. Quote Link to comment Share on other sites More sharing options...
Pmax2020 Posted October 31, 2021 Share Posted October 31, 2021 27 minutes ago, gruffydd said: It's called marketing and the banks are very good at it. I applied for a mortgage the other day to see how much I could get (over 500,000 as it happened) - there is no way it is affordable. Nor do I work in a sector offering much stability (and I'm on a probationary period. There isn't due diligence from either the lender or the borrower much of the time... the expectation being the government will step in. It almost reached a point that the government couldn't during the last financial crisis - the next will probably be the point the governments/central banks in the west do lose control... China must be laughing right now. I earn a tad more than the national average and the wife would otherwise too although she’s currently working 2 days until the youngest goes to school. Maybe I’m just too risk averse but a £400 mortgage of which we can voluntarily double to overpay each month seems the smart move right now. Having a base level £900- 1000 mortgage on a place where council tax will be £250-300 seems excessive even if our take home is approx £3600 after tax. Add fuel, food and basic utilities and it’s more than half our income. What if the company I work for goes bust? Best case scenario we would have to downsize and use savings in the interim period I guess. Im genuinely confused about what I should be doing…. I want to get a better family home for the us all but I forever expect the market to crash!!! I’ve watched others sell out and get their big spacious 400k family home and prices kept rising!! Quote Link to comment Share on other sites More sharing options...
dpg50000 Posted November 4, 2021 Share Posted November 4, 2021 On 31/10/2021 at 13:42, gruffydd said: On 31/10/2021 at 10:35, dpg50000 said: Not gonna happen. Or if it does, it will be one and done, then reversed as soon as the markets throw a tantrum. No that is not how financial markets work these days... the pressure comes from without and shifts domestic policy much of the time... so there will be no reverse. There is one trajectory right now and it's IR's up and mortgage rates up. Just not yet, obviously..... Genuine question, @gruffydd - I think you work in finance, and have been posting about how all your colleagues see IR rises as inevitable, coming soon (for the past couple of months), hefty rise by the end of the year etc. Why do you think you've got it so wrong in respect of the BOE? And do you and your colleagues still maintain IR rises are coming soon? (apologies if I've got the wrong person) Quote Link to comment Share on other sites More sharing options...
Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted November 4, 2021 Author Share Posted November 4, 2021 3 hours ago, dpg50000 said: Just not yet, obviously..... Genuine question, @gruffydd - I think you work in finance, and have been posting about how all your colleagues see IR rises as inevitable, coming soon (for the past couple of months), hefty rise by the end of the year etc. Why do you think you've got it so wrong in respect of the BOE? And do you and your colleagues still maintain IR rises are coming soon? (apologies if I've got the wrong person) Hefty inflation by the end of the year... rate rise? Hmmmmmm. The markets thought it would be today. I doubted that because of the previous furlough comments (and because the BoE appears to have become a creature of the government - perhaps it always was). But the longer they hold off, the messier the unwinding will be. Sit back and enjoy the popcorn. Quote Link to comment Share on other sites More sharing options...
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