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40% Of Mortgages To Reset

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http://money.independent.co.uk/property/mo...icle2856787.ece

'Many millions of homeowners have yet to feel the sting of rising interest rates, being sheltered by fixed-rate mortgages. More than 50 per cent of home loans are currently on a fixed rate, according to the Council of Mortgage Lenders. But between 75 and 80 per cent of these cheap deals are fixed for two years only.

Over the next 18 months, the CML estimates that more than two million borrowers will be coming off this type of mortgage – and straight into a much less borrowing-friendly interest rate environment.'

50% or half of 80% = 40%

And this figure represents 2 million, then we have only 5 million mortgages in this country.

Does that figure seem low to anyone else.

Anyway 40% will definitely see many less chirpy mortgagees... especially BTL's, or even multiple BTL's.

I really think rates will continue to rise to 8% in the next 2 years, as mentioned a few days ago on the news board this weekend was the end of the beginning and I don't think the worst has come by a long shot. I have too many memories of friends saying their fathers or uncles had successful businesses in the building trade that just went to pot in the last crash. I perceive these people to be the new BTL businesses that will fall flat and hard.

I'm amazed how bad this is getting, and seemingly so quick.

;)

Edited by music man

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Money Masters taught me to expect this.

Although no one knew what system of deceit they would use.

It seems CDO are one of the more obvious ones. SIV's seem interesting...

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http://money.independent.co.uk/property/mo...icle2856787.ece

'Many millions of homeowners have yet to feel the sting of rising interest rates, being sheltered by fixed-rate mortgages. More than 50 per cent of home loans are currently on a fixed rate, according to the Council of Mortgage Lenders. But between 75 and 80 per cent of these cheap deals are fixed for two years only.

Over the next 18 months, the CML estimates that more than two million borrowers will be coming off this type of mortgage – and straight into a much less borrowing-friendly interest rate environment.'

50% or half of 80% = 40%

And this figure represents 2 million, then we have only 5 million mortgages in this country.

Does that figure seem low to anyone else.

Anyway 40% will definitely see many less chirpy mortgagees... especially BTL's, or even multiple BTL's.

I really think rates will continue to rise to 8% in the next 2 years, as mentioned a few days ago on the news board this weekend was the end of the beginning and I don't think the worst has come by a long shot. I have too many memories of friends saying their fathers or uncles had successful businesses in the building trade that just went to pot in the last crash. I perceive these people to be the new BTL businesses that will fall flat and hard.

I'm amazed how bad this is getting, and seemingly so quick.

;)

40% is a lot....

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The problem is self perpetuating as well. When BTL mortgages reset they will try to put the rents up, if they succeed they will push inflation up and hence reinforce the IR raises.

Not necessarily. As with mortgage repayments higher rents take disposable income out of your pocket so although you will see rent inflation people will have less money to spend on other things so it may be a neutral effect.

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To be honest I think rents will decrease as we are dealing with a different animal this time around.

There is an abundance of rental property, and it is financed on the back of some very dodgy figures. I think the big question for many is how much am I prepared to subsidise a decreasing asset, at what point do I exit the market and take it on the chin before its too late.

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The problem is self perpetuating as well. When BTL mortgages reset they will try to put the rents up, if they succeed they will push inflation up and hence reinforce the IR raises.
Not necessarily. As with mortgage repayments higher rents take disposable income out of your pocket so although you will see rent inflation people will have less money to spend on other things so it may be a neutral effect.
There is an abundance of rental property, and it is financed on the back of some very dodgy figures. I think the big question for many is how much am I prepared to subsidise a decreasing asset, at what point do I exit the market and take it on the chin before its too late.

It's the lot and the fact this can be easily articulated as it has been on this site for some while makes me think times are really changing.

This week will be interesting from what I read on other posts.

p.s. all that money injected by the banks was on a 3 day loan - apparently SIV's then come in and re-endebt themselves or not? Yes or Not!?

Not that I know what I'm talking about really but banks and these CDO's are crumbling around us, I think this will effect the subcontractors within the govt. system such as all construction and building.

Every financial action has a real life effect.

This financial effect will be in the housing market IMHO and it may be severe.

After all housing has always cycled from affordable to inaffordable. One certainly can assume we are coming out of the inaffordable to the affordable. It may take years but once again I feel Cash is King.

Get those deposits up guys. :o

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I know, its great isn't it! :D

No :(

This is people's misery. Not just greedy, lying gits. But little people who tried their best and were thwarted.

I'd have liked to have just seen the interest rates rise and people give up gracefully over time.

Not all these horrid things coming from every corner

I hope the little people come out as best they can

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Mr Ellis of the Halifax... "For the vast majority of homeowners, interest rate rises are not causing any [serious] pain and base rate should now be nearing or at the top of the interest-rate cycle."

How would he know? Wishful thoughts they are...

The problem might not be [slightly] higher IRs when re-mortgaging for a new fix. Extra £65 a month? Phew... The problem could be the total absence of new credit so all these MEWers and people with £5K equity sniffing for a new bargain deal might not be able to remortgage at all. They will keep climbing the wall of variable IRs and this won't be extra £65, it will be much more. The bank will claw back all its losses on these old fixes and will reprice the variable rate according to suddenly deteriorating risk of these loans.

Edited by refusnik

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The problem might not be [slightly] higher IRs when re-mortgaging for a new fix. Extra £65 a month? Phew... The problem could be the total absence of new credit so all these MEWers and people with £5K equity sniffing for a new bargain deal might not be able to remortgage at all. They will keep climbing the wall of variable IRs and this won't be extra £65, it will be much more. The bank will claw back all its losses on these old fixes and will reprice the variable rate according to suddenly deteriorating risk of these loans.

Mmm... and even if it was £65, it's likely that that would mean £65 a month not going into the economy anymore.

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How would he know? Wishful thoughts they are...

The problem might not be [slightly] higher IRs when re-mortgaging for a new fix. Extra £65 a month? Phew... The problem could be the total absence of new credit so all these MEWers and people with £5K equity sniffing for a new bargain deal might not be able to remortgage at all. They will keep climbing the wall of variable IRs and this won't be extra £65, it will be much more. The bank will claw back all its losses on these old fixes and will reprice the variable rate according to suddenly deteriorating risk of these loans.

refusnik - this is a

MASSIVELY IMPORTANT DEDUCTION!!!!

Start a new thread with this old sausage - it's a beaut!

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It is incredible to think that the entire worlds economy is based solely on houseprices and where they are heading either up or down.

Not the entire world, but a part of it. Those economies where houses are used to fund purchases now on the back of some possible future income will be hit. US and the UK will feel it bad, because their economies allow such funding - other countries such as France and Germany do not, so they might get a little hit but not the full blown slapdown. Remember, the UK recession in the 80's didn's spread to all EEC countries, as their economies were managed differently.

This time I think it will be much the same. You can't have > 30% of all EEC debt (UK) and expect the impact to be the same everywhere.

Countries where the population have a higher savings ratio will not be as hard hit by the credit crunch.

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http://money.independent.co.uk/property/mo...icle2856787.ece

I really think rates will continue to rise to 8% in the next 2 years, as mentioned a few days ago on the news board this weekend was the end of the beginning and I don't think the worst has come by a long shot. I have too many memories of friends saying their fathers or uncles had successful businesses in the building trade that just went to pot in the last crash. I perceive these people to be the new BTL businesses that will fall flat and hard.

;)

Funily enough I also know of one such example, the BTL in this thread was previously a builder:

http://www.housepricecrash.co.uk/forum/ind...mp;#entry664980

And guese what, he is in the sh1t!!!

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Funily enough I also know of one such example, the BTL in this thread was previously a builder:

http://www.housepricecrash.co.uk/forum/ind...mp;#entry664980

And guese what, he is in the sh1t!!!

The "little people" are the 25% or so of the population who are not private home owners and are in rented or social housing. For them, the Crash will be painless, except if they lose their job.

For the other 75%, many of whom have over-stretched and holidayed/bought cars tv's etc, on the back of their "asset", I have no sympathy. Bring on the crash !!! :P

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The interest rate rises will slow down the ecomomy a bit but won't lead to massive problems.

1.25% increase in rates on a £100k mortage is about £24 a week extra. The majority of that increase will be covered by pay increases that people have got over the last 2 years. Sure they'll be slightly worse off but is not the end of the world.

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Guest d23
The "little people" are the 25% or so of the population who are not private home owners and are in rented or social housing. For them, the Crash will be painless, except if they lose their job.

'except if they lose their job'

not that small a proviso if you ask me; you could also add 'except if their business goes under' or 'except if their rent goes up as it did during the last crash' etc etc

the coming correction / crash and resultant recession are (imo) to be expected, prepared for and suffered through but to happily look forward to it is pretty ridiculous. I guess STR's with fat deposits may do OK but priced out FTB'ers are unlikely to be able to join in any expected joyous bear party and pick up a nice 3 bed semi repo for a song when it all goes tits up.

unless of course it's different this time and it'll be a precision overstretched BTL vulture seeking recession that targets only the financially irresponsible. Can't see that happening myself.

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'except if they lose their job'

not that small a proviso if you ask me; you could also add 'except if their business goes under' or 'except if their rent goes up as it did during the last crash' etc etc

the coming correction / crash and resultant recession are (imo) to be expected, prepared for and suffered through but to happily look forward to it is pretty ridiculous. I guess STR's with fat deposits may do OK but priced out FTB'ers are unlikely to be able to join in any expected joyous bear party and pick up a nice 3 bed semi repo for a song when it all goes tits up.

unless of course it's different this time and it'll be a precision overstretched BTL vulture seeking recession that targets only the financially irresponsible. Can't see that happening myself.

You are of course assuming that there is going to be a crash or recession in the near future and in my view extremely unlikely.

This is by no means certain. For instance, despite all the crap talked about the share market fall, we are simply back to the levels seen in April 2007, a mere 4 months ago.

The so called credit crisis is merely a shakeout and repricing in the fixed interest market of people of thought they were taking typical fixed interest market levels of risk in return for equity levels of return. This will all be forgottent by the end of Septmber.

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'except if they lose their job'

not that small a proviso if you ask me; you could also add 'except if their business goes under' or 'except if their rent goes up as it did during the last crash' etc etc

the coming correction / crash and resultant recession are (imo) to be expected, prepared for and suffered through but to happily look forward to it is pretty ridiculous. I guess STR's with fat deposits may do OK but priced out FTB'ers are unlikely to be able to join in any expected joyous bear party and pick up a nice 3 bed semi repo for a song when it all goes tits up.

unless of course it's different this time and it'll be a precision overstretched BTL vulture seeking recession that targets only the financially irresponsible. Can't see that happening myself.

In the coming crash, the little people may well get crapped-on. But they get that almost every week or month of their life. The next housing crash and all it's woes will be water off a duck's back to the majority of them. I've got quite a few family and friends who rent or are in council houses with the rent covered during bouts of unemployment etc. The rent they pay won't go up, because their houses and flats are not the type that a previous "property mogul" or BTL'er would dream of living in.

And none of them have a business - most poor people work for someone else.

I've also got some cousins who have lorded it up in the past 10 yrs with their BTL's, and lived the good life and never stopped telling the rest of us how "thick" we were not to get on the gravy-train. These are people who have pisspoor jobs but still spent their "increased wealth" tied up in their house. 2 hols a year to Thailand and Spain, minimum. Changed the car every 2nd year. etc etc.

It's these types that I have no sympathy for. If they burn in the meltdown, they burn. End of story.

Edited by Agentimmo

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You are of course assuming that there is going to be a crash or recession in the near future and in my view extremely unlikely.

This is by no means certain. For instance, despite all the crap talked about the share market fall, we are simply back to the levels seen in April 2007, a mere 4 months ago.

The so called credit crisis is merely a shakeout and repricing in the fixed interest market of people of thought they were taking typical fixed interest market levels of risk in return for equity levels of return. This will all be forgottent by the end of Septmber.

Assuming you are like the majority of the people (Joe Public) and don't dip in and out of the market, then it's just above the level it was at start of December 2006. In essence, any gains you've had in the last 9 months will have been wiped out.

If you'd sold all your shares/trusts 4 weeks ago, you would be laughing today. Timing is everything in the stock market casino. ;)

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No :(

This is people's misery. Not just greedy, lying gits. But little people who tried their best and were thwarted.

I'd have liked to have just seen the interest rates rise and people give up gracefully over time.

Not all these horrid things coming from every corner

I hope the little people come out as best they can

Is there a literary drama school they send people to round here? Some of these posts are a cross between Dracula and Lord of the Rings. Behave yourselves for gods sake and calm down. Cod histrionics just make people laugh rather than consider any serious points that could be in the post.

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Is there a literary drama school they send people to round here? Some of these posts are a cross between Dracula and Lord of the Rings. Behave yourselves for gods sake and calm down. Cod histrionics just make people laugh rather than consider any serious points that could be in the post.

Are you like this in person? Or does this site make you very grumpy?

You seem to seep with some unresolved anger everytime you post.

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http://money.independent.co.uk/property/mo...icle2856787.ece

'Many millions of homeowners have yet to feel the sting of rising interest rates, being sheltered by fixed-rate mortgages. More than 50 per cent of home loans are currently on a fixed rate, according to the Council of Mortgage Lenders. But between 75 and 80 per cent of these cheap deals are fixed for two years only.

Over the next 18 months, the CML estimates that more than two million borrowers will be coming off this type of mortgage – and straight into a much less borrowing-friendly interest rate environment.'

50% or half of 80% = 40%

And this figure represents 2 million, then we have only 5 million mortgages in this country.

Does that figure seem low to anyone else.

Anyway 40% will definitely see many less chirpy mortgagees... especially BTL's, or even multiple BTL's.

I really think rates will continue to rise to 8% in the next 2 years, as mentioned a few days ago on the news board this weekend was the end of the beginning and I don't think the worst has come by a long shot. I have too many memories of friends saying their fathers or uncles had successful businesses in the building trade that just went to pot in the last crash. I perceive these people to be the new BTL businesses that will fall flat and hard.

I'm amazed how bad this is getting, and seemingly so quick.

;)

Some will have even higher IR to pay than now, Its going to shock a lot of people.

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