Correct, but bear in mind that last year you could have bought a 25 year fix for something like 5%. That was guaranteed, contractual, if the bank loses as a result you still keep the keys, etc. The whole affair was underwritten by Big Finance so private house buyers could sign up without losing their shirts. Of course they didn't because they preferred the sound of £500 a month and see what happens to £1000 a month for the next 25 years, come what may.
Housing market
- Thread starter matt j
- Start date
About £1200. Modest, but better than a poke in the eye. What's your investment?managed 3.50 a day profit last year ... what sort of yield is that ?
There are always people who need to sell NOW and who can't wait. I've been one, when I got a new job, and I've bought from one who had retired and wanted to move to their new life. I bought my house 7-8 years ago, I put in low bids on a number of places, because none of the houses were "the one". They were just nice houses. The one that sold was the best of the lot, happy days. But the Estate Agent knows that if he has fielded 2 low bids from you in a fortnight that you won't be bidding for ever, and this forces his hand and that of the vendors.
andyoz
pfm Member
Exactly, what an offer but it was largely ignored. Can't say you could blame people with all the 'noise' coming from central bankers about them having the interest rate situation under control...
Mike Reed
pfm Member
Indeed it is, but that other 60% needing financing is accelerating by the day/week/month (delete as appropriate). The drop in property prices needs to be hefty to achieve the status quo ante.
Borrowers have had their days in the sun and for savers, the sun is beginning to shine. Not sure we'll be seeing any kind of equilibrium this side of next summer even if there are no more negative events. My only fixed rate bond, exc. when rolled over last October, is now way behind, so rolled over to easy access where everything stays until peaks look nigh.
My eldest daughter completed a bout 4 weeks ago and managed to port over her low interest mortgage. I can’t remember whether it is a 2 or 5 year deal. At worst they will have about 20 months. My youngest is waiting to complete but have a mortgage offer for a 5 year fixed rate at I think 4%. They were moaning at the rate but not now.
Dom500
pfm Member
Our two year fixed is up in march '23, I'm absolutely terrified of what we'll be attempting to pay then. My wife was adamant that lending would get easier as the pandemic fell away so I stupidly agreed not to fix for five years.
Currently paying £900 a month, god knows where it'll end up.
Currently paying £900 a month, god knows where it'll end up.
hifinutt
hifinutt
small btl not held in a company so get shafted for heavy tax on finance costs !!
hifinutt
hifinutt
which of course most btl cant do as interest only and makes no differnce what length it is
RobFTM
pfm Member
I did exactly that after Black Wednesday etc and all the mess that went with it. My very modest by today's standards mortgage went from about £400 pm to about £600 pm. That was massively worrying and frankly unaffordable, so the only way out was to increase the term. I mean I wasn't going to sell the HiFi was I? I'd just spent ages saving up for a nice Xerxes/RB300/OC-3 (or OC5 can't remember) from the London Bridge Sound Organisation.
According to this website, Historical interest rates in the UK, 1979-2017: rise and fall (mortgagestrategy.co.uk) BoE base rates went from 8.35% in 1987 to 14.8% in 1989.
Ouch. I feel the pain of youngsters today.
Joe Hutch
Mate of the bloke
My daughter and her partner have just moved to a new five-year fixed rate mortgage. They had to pay a large penalty to get out of their previous deal, which was due to end sometime next year. If rates had increased to say six per cent, they wouldn’t have been able to meet the costs.
mandryka
pfm Member
No, but in England they can put the rent up to cover their costs - and they can even keep the existing tenant if the rent is not unreasonable in rent tribunal terms and they haven’t already put it up in the previous 12 months.
You can see the invidious position of landlords with a mortgage on a BTL in Scotland. I expect they’ll want out as soon as they can get the property vacant - it’s a potential housing disaster up there. At the moment they could be trapped into a loss making concern - and if asset values fall, they’re toast! I wonder if the Scottish government have thought it through.
Ponty
pfm Member
That’s an interesting one because in my view, they are separate markets. A market rent is not set because one landlord has higher mortgage costs than another, the rent is set based on supply and demand for that property in that area. If a landlord wants to increase rent from say £1,200 to £1,500 to cover extra mortgage costs and the tenant says no and leaves, the market rent is still £1,200. It’ll just sit empty on the market at £1,500.
mandryka
pfm Member
I don’t disagree. What I was imagining is that the increased rent is still a market rent - that the rent prior to the increase was below market rent. I’m not sure myself whether my properties are or not - I don’t know how you find out short of going to a tribunal. Neither do I know how the tribunals make their calculations.
In any case, it’s worth a punt for a landlord to put the rent up with an S13 because it will only go to the tribunal if the tenant asks for it. And many tenants won’t, either because they don’t need to or because they want to live there and they’re scared of the S21 which will follow if they object to the rent increase.
In any case, it’s worth a punt for a landlord to put the rent up with an S13 because it will only go to the tribunal if the tenant asks for it. And many tenants won’t, either because they don’t need to or because they want to live there and they’re scared of the S21 which will follow if they object to the rent increase.
mandryka
pfm Member
He talked about homes which were “meant for first time buyers” and said that he may prevent landlords and people who already owned their home from buying them for rent or a second home. As far as I know he didn’t clarify which properties he had in mind.
Ponty
pfm Member
Yes, that’s fair enough if under market rent. The rental market is going to be carnage next year. Chatting to a tenant, has no desire to buy a house despite easily being able to. People seem to forget that many people rent through choice, despite it being rammed down everyone’s throat that everyone will buy a house if they can.
Mike Reed
pfm Member
Maybe I'm a bit naive in current situations, but surely, if they've taken a deposit, in effect, the property's yours. Last I heard, agents cannot now charge fees to lessees (except for some admin.)
ANYONE How would you get an assessment (even a guestimate) of current rental value of a property. The obv. one is ask a local agent, but then they'd want to view, or if not, it's sth I'd be cagey about doing.