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Cost Of Fuel Is Finishing Off F T B Market Altogether

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http://www.thisismoney.co.uk/mortgages/art...80&in_page_id=8

Fuel bills hit first time buyers

Chris Warmall, This is Money

18 February 2006

ROCKETING domestic fuel bills look set to put a dampner on the struggling first-time buyer property market, new research reveals.
THE HEAT IS ON: Finding a home that is energy efficient is important for first time buyers
According to the Yorkshire Bank, a third of first-time buyers would not squander their hard-saved deposit by putting in an offer on a draughty, poorly insulated or energy inefficient home.
The findings follow massive hikes in gas and electricity bills that have hit all households hard, but invariably impact on the tighter budgets of those getting their first foot on the property ladder

Another nail in the HPI coffin.

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Not surprised, but the post inspried me to look at the increase in gas prices anotherway. The average fuel bill is now £1000 (so says the media), this is roughly £16 a month more - translate this increase into the equivanlent IR hike,

Assuming the mortgage IR is the base rate 4.5% and the mortgage is paid over 25 years. So a £16 pm increase would have the following effect:

50k Equiv IR is 5% (+0.5)

100k Equiv IR is 4.75% (+0.25)

150k Equiv IR is 4.65% (+0.15)

200k Equiv IR is 4.63% (+0.13)

The average FTB mortage is going to be at least 100k, so what BG has done is equivalent to the BoE increasing the base rate by 0.25. Taking into account the fuel hikes in the past 6 months alone that's easily equivalent to a 0.5 increase in the base rate.

Ok maybe my analysis is a bit simplistic but if people couldn't cope with such increases in base rates how on earth will they cope with these fuel increases (apart form using less gas)?

Edited by mustrum_ridcully

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According to the Yorkshire Bank, a third of first-time buyers would not squander their hard-saved deposit by putting in an offer on a draughty, poorly insulated or energy inefficient home.

.

.

.

Another nail in the HPI coffin.

Err, doesn't that mean more upward pressure on prices of modern, well insulated, houses compared to older 'inefficient' ones?

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Err, doesn't that mean more upward pressure on prices of modern, well insulated, houses compared to older 'inefficient' ones?

Or more downward pressure on the price of old ones.

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Or more downward pressure on the price of old ones.

AND downward pressure on the price of old ones.

Which got me thinking. Would this benefit the 'value' of city centre 'shoeboxes'?

Edited by JohnG

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Not surprised, but the post inspried me to look at the increase in gas prices anotherway. The average fuel bill is now £1000 (so says the media), this is roughly £16 a month more - translate this increase into the equivanlent IR hike,

Assuming the mortgage IR is the base rate 4.5% and the mortgage is paid over 25 years. So a £16 pm increase would have the following effect:

50k Equiv IR is 5% (+0.5)

100k Equiv IR is 4.75% (+0.25)

150k Equiv IR is 4.65% (+0.15)

200k Equiv IR is 4.63% (+0.13)

The average FTB mortage is going to be at least 100k, so what BG has done is equivalent to the BoE increasing the base rate by 0.25. Taking into account the fuel hikes in the past 6 months alone that's easily equivalent to a 0.5 increase in the base rate.

Ok maybe my analysis is a bit simplistic but if people couldn't cope with such increases in base rates how on earth will they cope with these fuel increases (apart form using less gas)?

Interesting way of looking at it.

Dames

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http://www.thisismoney.co.uk/mortgages/art...80&in_page_id=8

Fuel bills hit first time buyers

Chris Warmall, This is Money

18 February 2006

ROCKETING domestic fuel bills look set to put a dampner on the struggling first-time buyer property market, new research reveals.
THE HEAT IS ON: Finding a home that is energy efficient is important for first time buyers
According to the Yorkshire Bank, a third of first-time buyers would not squander their hard-saved deposit by putting in an offer on a draughty, poorly insulated or energy inefficient home.
The findings follow massive hikes in gas and electricity bills that have hit all households hard, but invariably impact on the tighter budgets of those getting their first foot on the property ladder

Another nail in the HPI coffin.

The quote you have here doesn't say that FTBs aren't buying, it says that they won't buy cold drafty homes. A cynic might say that this is spin designed to get potential sellers spending more on home improvements. Does B&Q have a PR budget?

Billy Shears

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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