HPC forum mortgage brokers vs the market

[NoHPCinTheUK]

Mortgage brokers here keep repeating the narrative that IRs are going to go down soon, that the housing market is in good health and everything will be fine. 
 

What I’m ACTUALLY seeing in the markets is , on the contrary, a completely different story. 
 

Swaps are on their way up with the short term of the curve now approaching again the 5% level but it’s the long tail of the curve which is also going up now, showing that borrowers are investors are now capitulating and both are willing to pay more and ask more for longer durations. This is happening in the gov bond market, corp bond market and interest rates swaps market. 
 

Look at the gilts curve: maturities between 5 to 10 y are now showing the highest YTD %change. 
 

What it means is that the curve is steepening and because the movement is an upward trajectory in the medium-long term yields this a bear signal. 
 

investors are now starting to correctly price in another hike from the FED. 
 

Quite frankly this isn’t a market shift, the market has never priced in a cut. Yields never told this story. 
 

The whole of the “take as much debt as you can ‘cause I need my annual bonus” did. 
 

Now their lies are finally being exposed. 

[Huggy]

10 minutes ago, NoHPCinTheUK said:

The whole of the “take as much debt as you can ‘cause I need my annual bonus” did. 

They have been quite vocal and desperate recently.

As for years of my work in the future paying down debt, and my house buying war chest I have right now, "I'm not giving it away"

[mynamehere]

It would be bad business for brokers to advise rates are going down soon as that means people will delay using their services?

[NoHPCinTheUK]

3 minutes ago, mynamehere said:

It would be bad business for brokers to advise rates are going down soon as that means people will delay using their services?

Lol

 

Make a little effort now, when you’ll renew in 2y rates will be lower and your payment will go down. Trust me! 
 

This is the narrative at the moment. People are buying this story along with your products. 
 

The Markets are telling a different truth. For how long you think the industry will manage to keep the wheels spinning? 

[NoHPCinTheUK]

Also the £story….

 

this is literally the $ up vs all other currencies. Nothing to do with the BoE cutting rates soon. 

[NoHPCinTheUK]

Also if the £ tanks, Bailey will have to RAISE rates, not cut them. 
 

 

Edited April 23 by NoHPCinTheUK

[mynamehere]

58 minutes ago, NoHPCinTheUK said:

Lol

 

Make a little effort now, when you’ll renew in 2y rates will be lower and your payment will go down. Trust me! 
 

This is the narrative at the moment. People are buying this story along with your products. 
 

The Markets are telling a different truth. For how long you think the industry will manage to keep the wheels spinning? 

 

 

People have got used to 5% base rate very quickly  because it’s not really a very strange base rate. So why wouldn’t the market be more or less normal 

Not many reputable brokers would make rate predictions. Most buyers don’t make rate predictions either, the decision on whether to get 2 vs 5 yr relates more to volatility. 2 yr fixes were very popular when rates were 1% because it was stable  

mortgage approvals are more or less at the 10 year average but the recent market is more characterised by volatilit. If you smooth out the line it’s much less interesting 

 

as for how long. There is a lot of pent up demand due to uncertainty.  People need to move. Poke around this forum and you might find one or two who are planning to buy not when rates go down or up, but when there is more certainty and stability about what is going.  
 

 It’s good that supply is up  that means sales will be up too  

 

Edited April 23 by mynamehere

[NoHPCinTheUK]

People got used to 5% IRs because the whole housing industry told them it was just a temporary spike and that things will have gone back to normal very soon. That didn’t happen and that isn’t happening. 
 

What is actually happening is that people who bought during the pandemic are going to need to sell their houses as they cannot adjust to 5% and god only knows what’s going to happen to those buyers who are signing up to the everything back to normal mantra when interest rates won’t go down and possibly will be higher. 
 

House sales have collapsed. This is not a healthy market. 

[mynamehere]

Just now, NoHPCinTheUK said:

People got used to 5% IRs because the whole housing industry told them it was just a temporary spike and that things will have gone back to normal very soon. That didn’t happen and that isn’t happening. 
 

What is actually happening is that people who bought during the pandemic are going to need to sell their houses as they cannot adjust to 5% and god only knows what’s going to happen to those buyers who are signing up to the everything back to normal mantra when interest rates won’t go down and possibly will be higher. 
 

House sales have collapsed. This is not a healthy market. 

covid was 3 years ago. Remortgages have passed their peak  so we are into the longer tail now . If it was going to show distress it would have been 2023
 

Plenty of ways to deal with high rates 

there have been record inflows of savings into mortgage debt.

record increase in mortgage terms 

downsizing has put new pressure on prices in the middle segment but top segment still rising  

Can you define collapse?

 

 

 

[Stewy]

16 minutes ago, NoHPCinTheUK said:

What is actually happening is that people who bought during the pandemic are going to need to sell their houses as they cannot adjust to 5% and god only knows what’s going to happen to those buyers who are signing up to the everything back to normal mantra when interest rates won’t go down and possibly will be higher. . 

Their wages have gone up 20% to 30%+

[nero120]

Clearly business can't be great, they have far too much time on their hands if they're posting hundreds of posts here a week! VI HPC daily/weekly post count is a good indicator of market sentiment/activity!! 

[mynamehere]

Just now, nero120 said:

Clearly business can't be great, they have far too much time on their hands if they're posting hundreds of posts here a week! VI HPC daily/weekly post count is a good indicator of market sentiment/activity!! 

Yeah, in what direction is the correlation, because mortgage approvals and sale volume is unamgiously rising

[nero120]

1 minute ago, mynamehere said:

Yeah, in what direction is the correlation, because mortgage approvals and sale volume is unamgiously rising

HAHA!!! Keep dreaming timmy, hold on to those dreams tight!!

[mynamehere]

2 minutes ago, nero120 said:

HAHA!!! Keep dreaming timmy, hold on to those dreams tight!!

My what a fearsome debating opponent you are. 

Care to back up your vision of house market collapse with anything remotely resembling reality?

[Quid Game]

2 hours ago, NoHPCinTheUK said:

People got used to 5% IRs because the whole housing industry told them it was just a temporary spike and that things will have gone back to normal very soon. That didn’t happen and that isn’t happening. 
 

What is actually happening is that people who bought during the pandemic are going to need to sell their houses as they cannot adjust to 5% and god only knows what’s going to happen to those buyers who are signing up to the everything back to normal mantra when interest rates won’t go down and possibly will be higher. 
 

House sales have collapsed. This is not a healthy market. 

So the way to be accepted for a mortgage product is to prove to the bank that you’re ’used to 5% IR’s’? Or, do you have to pass affordability checks and other such lending restrictions? Interest rates have gone up and so have people’s wages and wealth in general. Not everyone’s, and no doubt not in your social circle, but for the top 15-20% of society things are just fine. 
 

When you dust off the ‘house sales have collapsed’ line for the millionth time on this forum, how do you define this? You’re talking utter tripe. 
 

“Seasonally adjusted residential transactions in February show a second consecutive month-on-month increase, rising 1% from 81,930 in January 2024 to 82,940 in February 2024. Non-seasonally adjusted residential transactions increased by 9% in February 2024 relative to January 2024. Seasonally adjusted residential transactions are 6% lower than in February 2023.”

https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above/uk-monthly-property-transactions-commentary

 

[Locke]

3 hours ago, mynamehere said:

People have got used to 5% base rate very quickly  because it’s not really a very strange base rate.

Why, why, oh whysy why, then, did we have 15 years of zero percent, hmmmmmmmmmm?

[regprentice]

3 hours ago, mynamehere said:

It would be bad business for brokers to advise rates are going down soon as that means people will delay using their services?

Theres an article in the FT today broadly on this topic.... promoting "long term mortgages" (i.e. 10 years+ fixed rates) and the general consensus in the comments is that you'll never wean brokers off of the cycle of 2 year fixes with juicy fees every 2 years  

[NoHPCinTheUK]

9 minutes ago, Quid Game said:

So the way to be accepted for a mortgage product is to prove to the bank that you’re ’used to 5% IR’s’? Or, do you have to pass affordability checks and other such lending restrictions? Interest rates have gone up and so have people’s wages and wealth in general. Not everyone’s, and no doubt not in your social circle, but for the top 15-20% of society things are just fine. 
 

When you dust off the ‘house sales have collapsed’ line for the millionth time on this forum, how do you define this? You’re talking utter tripe. 
 

“Seasonally adjusted residential transactions in February show a second consecutive month-on-month increase, rising 1% from 81,930 in January 2024 to 82,940 in February 2024. Non-seasonally adjusted residential transactions increased by 9% in February 2024 relative to January 2024. Seasonally adjusted residential transactions are 6% lower than in February 2023.”

https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above/uk-monthly-property-transactions-commentary

 

Now show us how they compare to last year and 2019. 

[mynamehere]

9 minutes ago, Locke said:

Why, why, oh whysy why, then, did we have 15 years of zero percent, hmmmmmmmmmm?

Because the Financial crash in 2007? Average base rate over last 50 years is about 5 - 6%

 

Anyway,  are mortgage brokers even allowed or expected to speculate where rates are going? Nobody goes to a broker for advice on whether to buy a house or not, they go to try and get the best mortgage rate?

 

Edited April 23 by mynamehere

[msi]

2 minutes ago, mynamehere said:

Because the Financial crash in 2007?

average base rate over last 50 years is about 5 - 6%

The 'new normal' of sub 2% vanished like a fart in the air.....

[Quid Game]

3 minutes ago, NoHPCinTheUK said:

Now show us how they compare to last year and 2019. 

Seasonally adjusted 

2019 - 96,500

2023 - 87,850

2024 - 82,940 (estimate)

 

Non-seasonally adjusted 

2019 - 81,580

2023 - 75,300

2024 - 73,360 (estimate) 

https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above/uk-monthly-property-transactions-commentary

So to conclude, your definition of a collapse is a fall of 14% in transaction volumes over a period of 5 years (or 10% if you use non-seasonally adjusted figures)? Back over to you to explain how you’re not talking utter tripe.  

 

[Blobsy]

I disagree people are used to the 5%. Far from it.
Many still think we are going back to ‘normal’ 0.5%

[Stewy]

8 minutes ago, Blobsy said:

I disagree people are used to the 5%. Far from it.
Many still think we are going back to ‘normal’ 0.5%

They'll be right. ✓ 

[70PC]

30 minutes ago, Blobsy said:

I disagree people are used to the 5%. Far from it.
Many still think we are going back to ‘normal’ 0.5%

I agree. It took 300 years before any government tried ZIRP. The hangover is inflated asset prices and unsustainable debt for many, including HMG. We also now have 9 million people of working age not looking for jobs. I cannot low interest rates coming back for a long time.

[MerchantNavy]

17 minutes ago, 70PC said:

I agree. It took 300 years before any government tried ZIRP. The hangover is inflated asset prices and unsustainable debt for many, including HMG. We also now have 9 million people of working age not looking for jobs. I cannot low interest rates coming back for a long time.

Maybe not 0, but could settle between 2-3% which will be a lot more affordable than current rates.