Could you elaborate a little. Are we mainly talking about a tight supply of labour. Maybe the answer is that we have to trigger a recession and shrink the economy so that some people lose their jobs. This is how we used to fix inflation up until the 1990s. It sounds brutal.
Anyone concerned by interest rates rising re mortgage?
- Thread starter SirGalahad
- Start date
Could you elaborate a little. Are we mainly talking about a tight supply of labour. Maybe the answer is that we have to trigger a recession and shrink the economy so that some people lose their jobs. This is how we used to fix inflation up until the 1990s. It sounds brutal.
Sponsored Links
- Joined
- 11 Jan 2004
- Messages
- 44,089
- Reaction score
- 2,924
- Country
We are very lucky. We don't have a mortgage.
But I feel for my eldest lad. He's just got his results. He got a high First in Business Management and Finance at Nottingham Trent.
He has a 2 year placement with a firm starting in September but his student loan is something stupid. 60K plus ...
But I feel for my eldest lad. He's just got his results. He got a high First in Business Management and Finance at Nottingham Trent.
He has a 2 year placement with a firm starting in September but his student loan is something stupid. 60K plus ...
It's all in safe hands.
Transforming our world: the 2030 Agenda for Sustainable Development | Department of Economic and Social Affairs
PreambleThis Agenda is a plan of action for people, planet and prosperity. It also seeks to strengthen universal peace in larger freedom.
This is a good thread worthy of a read and I agree mostly with this.
Thread by @RichardJMurphy on Thread Reader App
@RichardJMurphy: We face a cost-of-living crisis created by events outside the UK triggering rates of inflation that many in this country have never witnessed before. In the face of these rising prices the Bank of E...…
threadreaderapp.com
The supply side issues I was referring to were mostly a post-Covid effect on the global supply chain. Funnily enough I made a thread on the inflation on material costs we were seeing back in May 2021, this could have been a result of a mixture of Covid and Brexit issues but those same price increases were being seen across all markets and across most of the world.
The inflation we're experiencing now is in my opinion the ongoing fallout from this time... suppliers are very quick to increase costs but very slow to drop them again when other factors have resolved themselves. Once you've established that the consumer is willing to pay X for a product or service, what motivation is there for the industry to drop the price back to Y when so much money can be made continuing to charge X.
The Banks seem desperate for a recession by the looks of things...
Last edited:
Sponsored Links
I'm concerned! We're only in our 30s and have a long life ahead of work and mortgage ownership. Luckily I locked in a new rate of about 2% in September 2021 until 2026, but after that is a concern.
I'm tired of hearing the same drivel from some people who say "ah at last, interest rates getting back to normal" as if to say that what's happening just means things are going back to how they were when they were a young home owner.
What never gets mentioned is house prices. They're not normal, and have risen substantially faster than wages have done. They are at a figure which make these frequent percentile increases in rates result in big jumps on mortgage payments.
We already spend over £500 on childcare a month, now we're facing hundreds of pounds more expenditure in keeping a roof over our heads.
We're here to breed and exist, but that's not all I want to do!
I'm tired of hearing the same drivel from some people who say "ah at last, interest rates getting back to normal" as if to say that what's happening just means things are going back to how they were when they were a young home owner.
What never gets mentioned is house prices. They're not normal, and have risen substantially faster than wages have done. They are at a figure which make these frequent percentile increases in rates result in big jumps on mortgage payments.
We already spend over £500 on childcare a month, now we're facing hundreds of pounds more expenditure in keeping a roof over our heads.
We're here to breed and exist, but that's not all I want to do!
Not suggesting that at all. Dunno which bit you are referring to in my post which might suggest otherwise..
Why does everyone compare average wages with average price of houses and say it’s worse? You should be ignoring the price of the house and concentrate on the average percentage of the average wage spent on the mortgage of an average house. Then factor in things that I and nobody else I knew had with a mortgage in the eighties and nineties. I’m talking about new furniture, carpets, curtains, fitted kitchen etc, foreign holidays, Gym subscriptions, at least one new car on lease plus one other, mobile phone contract each, Sky TV/Netflix/Prime subscription etc etc. None of us had any of those things - we sacrificed when we bought our homes. Most youngsters now couldn’t live without those 'basics' and would choose them over owning a house in need of repair full of other peoples second hand cast-offs, our own son included! Our Daughter is the complete opposite.
That's exactly what I've done -- the point is that household income hasn't grown in proportion to the price of the house. So the higher the cost of the house, the high the mortgage repayment, and now interest rates are getting higher, that payment is going to get even higher. There's no way my parents were spending £900 on a mortgage, which is what we could be paying soon. That's a massive chunk.
I'll be honest, I know exactly what you're saying about all the (often unnecessary!) luxuries many of the younger generations have, and I agree as I've argued it myself. But I promise you if you came round to our house you'd see how few we have. We don't do Sky/Prime, I do nearly all the repairs on my car, I pay SIM only on my wife's old phone, and used to frequent the car boot sales before Covid killed them off. Our son's toys are nearly all second hand as are his clothes, which I don't mind at all. That's why I drive an old 22-year-old car around and get my clothes from charity shops! Not fussed at all about 'image'.
For many though, not buying a coffee from Starbucks or cancelling a subscription to Netflix is just playing with the margins. Almost stagnant wages, inflation and historic house prices dwarf it.
His main argument seems to be that increasing interest rates is, in itself, inflationary. And that what we need to do to reduce inflation, is to declare that interest rates have peaked, and then start cutting them. He admits that this is contrary to any textbook economic theory. Is there anything or anyone to back him up, or is it all his own idea? It sounds like a bit of a punt in the dark to me.
It depends a lot on which years you look at, and which region. House prices round here are only about 30% higher than their mid 2000s peak. Earnings in this region are meant to be about 45% higher since then. At that time, the average mortgage rate was about 5.5%. So, if anything, mortgage costs are still cheaper right now than in the mid 2000s.
Nope, no mortgage, so Iook forward to the increases in interest rates.
My residential property is on a low fixed rate until 2026. I'm already making overpayments but might increase these slightly so come remortgage my payments don't increase by much. I'm now in my 50s and want the mortgage cleared by the time I'm 59-60 latest.
My BTLs are on relatively low fixed rates until 2025 so I'll just need to see what sort of rates they're offering come remortgage. Perhaps by then things might have calmed down a bit with some semi-reasonable products available.
I do have one BTL that I foolishly left on the SVR as the mortgage rate was, until now, very reasonable. So I've seen that monthly payment go up and up and up
If things go from bad to worse in any sort of dramatic and sustained way, the BTLs will get offloaded.
My BTLs are on relatively low fixed rates until 2025 so I'll just need to see what sort of rates they're offering come remortgage. Perhaps by then things might have calmed down a bit with some semi-reasonable products available.
I do have one BTL that I foolishly left on the SVR as the mortgage rate was, until now, very reasonable. So I've seen that monthly payment go up and up and up
If things go from bad to worse in any sort of dramatic and sustained way, the BTLs will get offloaded.
Well all the other 'punts in the dark' have led us to where we are now...
Nothing that the BofE can do can affect the external factors and the self inflicted consequences of brexit...
More and more will suffer and it will affect everyone except the very rich!
Sponsored Links
Similar threads
