Interest rate rise

entwisi · 11-01-2007, 22:51

Is it only me or should these people on the news who are winging at a £15 per £100 K mortgage loan are that skint that they can't afford it! If they are are you telling me they don't have ANY 'luxury's' in life? after all, even on a £500K mortgage we are only talking £75 a month, thats less than a lot of people spend on beer a week never mind wine at £XX a bottle

SPUGGIE J · 11-01-2007, 23:49

They are worried that they might not be able to keep up with the Jones's. Send them to Africa for a real dose of what happens if you cant afford anything.

Ianto.W. · 12-01-2007, 00:49

I fully agree with you Ian, it's a case of "if you can't stand the heat , dont go in the kitchen". These things should be thought through at length before being embarked upon, money is cheap to borrow at the moment, but just look back to the 'Thatcher' years', base rate 13 per cent plus 5 per cent bank charges for company overdrafts. No wonder half the country went bust!

garinda · 12-01-2007, 01:01

I found my old London flat on an Estate Agent's site last weekend.

Just an ordinary, first time buyers, one bedroom garden flat, near a tube line. Nothing special. I bought it in 1991 for £42,000, and sold it eight years later for well over three times that amount. It's now for sale at £225,000.

Unlike other people, I do have sympathy for people who are affected by the interest rise, especially for people who felt forced to take out motgages up to five times their salaries. £75 might be the difference from them worrying about the bills that fall on their mat or not.

shakermaker · 12-01-2007, 01:14

A lot of people do not have a choice but to take up these huge mortgages in comparison to their income. The price of living is increasing at an exortionate rate...I do not look forward to buying my first home at all

garinda · 12-01-2007, 01:21

Without my parents giving me a deposit, and it taking most of my wage, I'd have never got onto the housing chain. In London I'd rented for six years before managing to buy. Renting was expensive, more so than my mortgage.

I feel sorry for young people today, as unlike the rest of Europe there isn't a massive stock of affordable, private accomodation to rent, and it cuts down the choices for people, who for whatever reason, who prefer not to buy.

WillowTheWhisp · 12-01-2007, 08:22

Family members "dahn sahth" find it extremely difficult to get on the housing ladder. They don't want to pay hundreds of thousands for a house but they have no option - the only things cheaper are one bedroom flats and that's no good if they want to start a family. And of course having a child makes life more expensive too so I have every sympathy for people who are struggling and dread the interest rises.

garinda · 12-01-2007, 09:40

The average starting salary for a newly qualified nurse is £13,251. Which if offered 95% mortgage would mean they would be looking at properties up to £45,000. A hard task in Hyndburn, and impossible in other parts of the country.

entwisi · 12-01-2007, 10:30

but is this a case of people's lives changing. It always used to be you bought a house when you got married/decided to live together so there would be 2 wages coming in. As such they could afford a bit more. (IIRC it used to be 3x 1st + 2nd OR 2.5X combined. Given two 'new' nurses you could get over £50K mortgage so with a deposit your into £60K+)

WillowTheWhisp · 12-01-2007, 10:42

Not much going in many parts of the country for £60K. Ours was recently valued way above that.

Some areas are obviously different to others and you'd probably get something for £50-60K in Hyndburnn but not in other areas.

entwisi · 12-01-2007, 10:57

but willow taht example is also taking it as 2 people on what is just over minimum wage. Most couples I know have at least one person on more than that.

I know its maybe not as easy as it was when I bought our house but its still possible.

In the original post I was trying to show that even though rates rise people seem to value their luxuries over and above their homes. It does also come down to people ignoring advice from Banks/ etc that you should always ensure you are not stretched financially when you buy property. There needs to be a buffer zone between incomings and outgoings to handle things like rate rises, emergency repairs, maintenance etc.

garinda · 12-01-2007, 11:02

Quote:

Originally Posted by entwisi

but is this a case of people's lives changing. It always used to be you bought a house when you got married/decided to live together so there would be 2 wages coming in. As such they could afford a bit more. (IIRC it used to be 3x 1st + 2nd OR 2.5X combined. Given two 'new' nurses you could get over £50K mortgage so with a deposit your into £60K+)

...not a great deal for sale in Hyndurn for sixty grand, and in other parts of the country it might buy you a garage.

WillowTheWhisp · 12-01-2007, 11:03

I remember when we bought our first house and we were looking at the cheaper end of the market with the intention of not tying too much up in the mortgage the banks and B Socs refused to lend on anything below what we could afford!

Mad or what?

grego · 12-01-2007, 11:05

It is extremely difficult for first time buyers these days but I agree with what Entwisi is saying regarding luxuries, its not a great amount compared to what people spend on beer, fags etc, though I dont think our wages will increase by 5+% this year!

jedimaster · 12-01-2007, 11:07

firstly house prices down south are so high that we had no choice but to move up here to get on the property ladder
secondly when we bought this house 2 years ago (just under £53.000) there were two of us working however shortly afterwards my wife became ill and was unable to work making things very difficult-we had to borrow left right and centre just to stay afloat. Even though my wife has now gone back to work we are only just managing to stay afloat so the increase in interest rates will make things more difficult for us

so yes i do have sympathy for those who are going to struggle

i also believe that it is an overreaction from the bank of england due to christmas and increased house prices i can easily see a market crash on the way again!