Jump to content
House Price Crash Forum
Sign in to follow this  
I Told You So

Coming Off Fixed Rate Deals

Recommended Posts

I may be wrong but I think most fix rate deals are for 2 years, which means that many who bought in 2003 when base rate was 3.5% fixed again in 2005 when base rate was 4.75% (then dropped to 4.5% Aug 05).

They are now due to fix again when the base rate is 5.5% and rising, this surely means that any buyers fron 2003 face huge increases in there monthly payments. Also 2005 buyers lured by the crazy rate cut now face fairly substantial increases.

2008 will bring big changes to the 5 year fix merchants.

Repos will start to go through the roof this year IMHO.

Although I want a total collapse in house prices I feel for these people as they were all misled by the city and the media in being told low interest rates would last forever.

Smith, Bootle etc watch out for the backlash - useless pri*ks

Share this post


Link to post
Share on other sites
Although I want a total collapse in house prices I feel for these people as they were all misled by the city and the media in being told low interest rates would last forever.

If we get a total collapse in house prices what makes you so sure that you'll be immune to the effects it will have on the wider economy?

If the underlying health of the economoy is as bad as some on here make out were all screwed, just by varying degrees.

Share this post


Link to post
Share on other sites
Smith, Bootle etc watch out for the backlash - useless pri*ks

:lol::lol::lol:

All the ars*hol*s will get what's coming to them when the punters revolt. :lol::lol::lol:

First up,

New PM, Mr. G. Brown - no votes.

BTL Self Cert Speculators - hated and put in jail.

EA's - always hated but now bankrupt as well.

Banks - millions of people defaulting on all their debt.

Good times ahead then. :lol:

Share this post


Link to post
Share on other sites

Except the banks are happy to have high debts because they no longer hold much of the risk - that's all packaged up and sold to things like insurance companies, pension schemes etc. So yes, if there's a huge crash we're all screwed, because we're effectively holding the bank's lending risk for them. Which is why letting it get out of hand in the first place was such a dumb idea.

Share this post


Link to post
Share on other sites
If we get a total collapse in house prices what makes you so sure that you'll be immune to the effects it will have on the wider economy?

Consider the impact of disposable income being used to service debt instead of being spent in the shops.

Share this post


Link to post
Share on other sites
Consider the impact of disposable income being used to service debt instead of being spent in the shops.

What would that be? Inflation only in house prices and not in the shops?

A 'collapse' in house prices would not happen in isolation, there would be repercussions throughout the whole economy. It's a common theme on here that people seem to be sitting around waiting for the much waited for crash yet they fail to see that it would have financial implications for them too.

Share this post


Link to post
Share on other sites

nah, i think most people appreciate that a crash in housing would also have implications on the wider economy.

we suffer with the lunatics on the way up, and we suffer for their lunacy on the way down.

the only consolation is the REAL asset pile built up in the mean time to weather the storm when peoples PAPER profit/money disappear beneath them.

Edited by ca-uk

Share this post


Link to post
Share on other sites
It's a common theme on here that people seem to be sitting around waiting for the much waited for crash yet they fail to see that it would have financial implications for them too.

Just as not every individual property will be reduced in price by a general and average crash, not every individual person will be hammered by a general and average recession.

No matter how bad it gets, save the complete collapse of our civilisation, people will still need a home, heating, water, food, fuel, etc.

Baccy and beer won't do too badly, either.

Share this post


Link to post
Share on other sites
What would that be? Inflation only in house prices and not in the shops?

A 'collapse' in house prices would not happen in isolation, there would be repercussions throughout the whole economy. It's a common theme on here that people seem to be sitting around waiting for the much waited for crash yet they fail to see that it would have financial implications for them too.

It will lead to a dramatic drop in consumer spending (less disposable income as more needs to be spent on mortgage payments, plus possible end of MEW) and that will eventually lead to retail layoffs, wider unemployment and recession!

A HPC will be a disaster for many, with the possible exception of those in recession-proof jobs. Me? I'm one of the lucky ones.

:)

Share this post


Link to post
Share on other sites
Repos will start to go through the roof this year IMHO.

Although I want a total collapse in house prices I feel for these people as they were all misled by the city and the media in being told low interest rates would last forever.

Smith, Bootle etc watch out for the backlash - useless pri*ks

You forget wage inflation. People who fixed their mortgages sometime ago will have enjoyed several pay rises since. Whats wage inflation sitting at, 4% or so? So someone earning 20k might now be earning 2 or 3 thousand more, on average - we are talking across the board as it were. The higher they earn, the bigger 4% is in real cash, I imagine many families are dual income too. Yeah, maybe their repayments might go up by a similar amount, tough, but hardly repo time!

From a personal point of view, my smaller than expected rise this year :( easily covers the rate rise :)! Although my fix has a while to run yet...

Also, we spent 1bn on gossip magazines, we gave 8bn to charity, 10bn went on "fad" foods, there was a post last week that showed how much cash people waste on lots of different useless things. Plenty of ways for peeps to economise if required.

Yep, we all know some out there will have borrowd stupidly and will be pushed over the edge, but I think we have to wait and see before making any predictions. I hope for the people involved that they get through it OK, not sure I can enjoy the idea of other people's misery but I realsie there are plenty of oddballs who will.

Edited by Orbital

Share this post


Link to post
Share on other sites
You forget wage inflation. People who fixed their mortgages sometime ago will have enjoyed several pay rises since. Whats wage inflation sitting at, 4% or so? So someone earning 20k might now be earning 2 or 3 thousand more, on average, the higher the earn, the bigger 4% is in real cash, I imagine many families are dual income too. Yeah, maybe their repayments might go up by a similar amount, tough, but hardly repo time!

I wouldnt be so sure about that.

My Union went on strike last year and the agreed pay increase was for two years and I forget the details but was for something in the region off 5% over two years.

Yes crap Union and potentially crap job but not everyone is driven by money.

Edited by lulu

Share this post


Link to post
Share on other sites
You forget wage inflation. People who fixed their mortgages sometime ago will have enjoyed several pay rises since. Whats wage inflation sitting at, 4% or so? So someone earning 20k might now be earning 2 or 3 thousand more, on average - we are talking across the board as it were. The higher they earn, the bigger 4% is in real cash, I imagine many families are dual income too. Yeah, maybe their repayments might go up by a similar amount, tough, but hardly repo time!

Also, we spent 1bn on gossip magazines, we gave 8bn to charity, 10bn went on "fad" foods, there was a post last week that showed how much cash people waste on lots of different useless things. Plenty of ways for peeps to economise if required.

Yep, we all know some out there will have borrowd stupidly and will be pushed over the edge, but I think we have to wait and see before making any predictions. I hope for the people involved that they get through it OK, not sure I can enjoy the idea of other people's misery but I realsie there are plenty of oddballs who will.

Oh yes, I meant to add, whilst much money is spent on "crap" (not much by me) someone is employed producing/distributing ths crap if people stop buying it employment rates will suffer. I can only see this ending one way and it is not positive.

The economy could have been controlled and not made so reliant on people buying crap - but it wasn't and the blame will need to be directed somewhere. It is not my fault that house prices went mental - neither is it my fault for wanting them to come down again - the aforementioned should not have been allowed to happen - it will always end in tears.

Share this post


Link to post
Share on other sites
It will lead to a dramatic drop in consumer spending (less disposable income as more needs to be spent on mortgage payments, plus possible end of MEW) and that will eventually lead to retail layoffs, wider unemployment and recession!

A HPC will be a disaster for many, with the possible exception of those in recession-proof jobs. Me? I'm one of the lucky ones.

:)

What type of job is recession proof ?

Share this post


Link to post
Share on other sites
What would that be? Inflation only in house prices and not in the shops?

A 'collapse' in house prices would not happen in isolation, there would be repercussions throughout the whole economy. It's a common theme on here that people seem to be sitting around waiting for the much waited for crash yet they fail to see that it would have financial implications for them too.

Yeah but those with more stand to lose LOTS more than those with nuffink :-) Bring on the crash in house prices!

Share this post


Link to post
Share on other sites
If we get a total collapse in house prices what makes you so sure that you'll be immune to the effects it will have on the wider economy?

If the underlying health of the economoy is as bad as some on here make out were all screwed, just by varying degrees.

i'm going to try again with this one - interest rates are going up because the economy is currently strong - this may well be on borrowed money but not all of it is - people borrowed enormous sums of money at ridiculously low IRs in the belief they would stay there (not many picked up on the likelyhood that when things are at a historical low, the chances are they will go up) - people will still have jobs but not be able to service their debts at the higher IR - 1989 revisited - bliss

Share this post


Link to post
Share on other sites
Guest d23
A HPC will be a disaster for many, with the possible exception of those in recession-proof jobs. Me? I'm one of the lucky ones.

:)

this is smug even by your at least twice daily 'I've got a recession proof job :)' posts

you've alluded to the nature of your job (public sector) but what exactly is it that you do?

I do hope it's not one of those parasitical nonsense publice sector jobs that seem so prevalent nowadays.

Share this post


Link to post
Share on other sites
I may be wrong but I think most fix rate deals are for 2 years, which means that many who bought in 2003 when base rate was 3.5% fixed again in 2005 when base rate was 4.75% (then dropped to 4.5% Aug 05).

They are now due to fix again when the base rate is 5.5% and rising, this surely means that any buyers fron 2003 face huge increases in there monthly payments.

Can you quantify that on, say, a £150k mortgage? Realistically, how painful will it be? We talk about hikes breaking people's finances, however what is the hit, really... can it, for example, be accommodated by cutting back on chav-mags and lippy or are we talking arms and legs??

Share this post


Link to post
Share on other sites

All very well talking about wage inflation at 4.0% I think you may have forgotten that taxatiion is at its highest for well over 10 years so actual disposable income probably hasn't risen that much and dont forget the (hugely underestimated) inflation thats eating away at your money.

Share this post


Link to post
Share on other sites
You forget wage inflation. People who fixed their mortgages sometime ago will have enjoyed several pay rises since. Whats wage inflation sitting at, 4% or so? So someone earning 20k might now be earning 2 or 3 thousand more, on average - we are talking across the board as it were. The higher they earn, the bigger 4% is in real cash, I imagine many families are dual income too. Yeah, maybe their repayments might go up by a similar amount, tough, but hardly repo time!

From a personal point of view, my smaller than expected rise this year :( easily covers the rate rise :)! Although my fix has a while to run yet...

Also, we spent 1bn on gossip magazines, we gave 8bn to charity, 10bn went on "fad" foods, there was a post last week that showed how much cash people waste on lots of different useless things. Plenty of ways for peeps to economise if required.

Yep, we all know some out there will have borrowd stupidly and will be pushed over the edge, but I think we have to wait and see before making any predictions. I hope for the people involved that they get through it OK, not sure I can enjoy the idea of other people's misery but I realsie there are plenty of oddballs who will.

This is true.

Yes there are stupid people who have overstretched themselves, but there are also allot of sensible people as well who...

1) purchased and spend within their means

2) have enjoyed good pay increases over the past few years (both them and a partner)

So the stupid will suffer more if interest rates continue to rise - but that's the way it goes.

Edited by ragingbull

Share this post


Link to post
Share on other sites
What type of job is recession proof ?

I don’t think anything is totally recession proof, but anything that is a regulatory requirement or is non discretionary is a good bet.

EG: doctors, nurses, police etc.. auditing, health and safety inspector, school inspector

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 354 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.