Remortgage woes

[MrGrumpy]

Well, those multipliers are insane.

The lender is irresponsible and the mortgagees cannot have thought through the risk factor.

I hope there are not many mortgages out there granted on these terms.

Dumb and dumber comes to mind and I am very short on sympathy for those concerned tbh.

£20k salary is not far off minimum wage - at what point did minimum wage earners start getting hefty mortgages I wonder?

Unless you can save a hefty deposit , a mortgage is going to be a huge anchor these days . My wife’s first flat , zero deposit mortgage . This is going back to 92 ish . It was affordable . Same flat now you would need to earn £50k salary if using the 3x multiplier plus at least a 10% deposit.
It’s just not comparable now and that’s the real issue.

However I do take your point on the other expenses . Some folk are running about in very nice motors and it’s all debt.

 

[Slick]

Unless you can save a hefty deposit , a mortgage is going to be a huge anchor these days . My wife’s first flat , zero deposit mortgage . This is going back to 92 ish . It was affordable . Same flat now you would need to earn £50k salary if using the 3x multiplier plus at least a 10% deposit.
It’s just not comparable now and that’s the real issue.

However I do take your point on the other expenses . Some folk are running about in very nice motors and it’s all debt.

I suppose its all relative, but I saved 10k earning a fiver an hour and bought a wee starter home for 36k in 89, when all my mates were buying flats for 25 to 28k. I just checked, and the same house sold for 90k 18 months ago, so still not out of reach of any young couple.

 

[rogerzilla]

I suppose its all relative, but I saved 10k earning a fiver an hour and bought a wee starter home for 36k in 89, when all my mates were buying flats for 25 to 28k. I just checked, and the same house sold for 90k 18 months ago, so still not out of reach of any young couple.

Where's that, out of interest? Houses in the Birmingham road where I bought my first house in 1991 are now 260k rather than 35k then.

 

[Gunk]

I suppose its all relative, but I saved 10k earning a fiver an hour and bought a wee starter home for 36k in 89, when all my mates were buying flats for 25 to 28k. I just checked, and the same house sold for 90k 18 months ago, so still not out of reach of any young couple.

That’s not done very well, which part of the country is that?

 

[Slick]

Where's that, out of interest? Houses in the Birmingham road where I bought my first house in 1991 are now 260k rather than 35k then.

That’s not done very well, which part of the country is that?

My wife worked in the business so knows her stuff and she tells me the flats that sold for around 25k at that time, can be picked up for around 70k today. This is in small-town Scotland, but it does give you a clue as to why so many people from South of the border decide to retire up here.

 

[gbb]

I'm thinking the same, north west perhaps?
Ours was £38k, reduced to £17k with discount circa in the late 90s Houses in the same street are now £160 to £180k...and believe me, while it's not the bronx, far far from it, its certainly not a desirable area
So you think, for a starter home, you'd still need some serious deposit and mortgage. That's probably why most houses go to landlords...and the negative outcome of that is HMOs, and all the problems they bring, just dragging the area down a little at a time.

 

[rogerzilla]

That’s not done very well, which part of the country is that?

My question too, although if it was bought at the very peak of the market, in Cambridgeshire, with a new house premium, it would have bombed in price by 35-40% between 1989 and 1993.

 

[Slick]

Don't get me wrong, we sold our 36k house for 45k 3 years later, bought one for 68k and sold it for 175k 18 years later. It was renovated twice in that time, and was sold with a new roof and cracking big driveway, but still not a bad return.

Its a bit like fishing, some people only tell you about the good times.

 

[rogerzilla]

I suspect my current house (bought 2014 for 160k in poor condition, after standing empty for a whole winter) would sell for about £260k now, but it has had around 40k spent on it. Not a spectacular return for 10 years: about 2.6% a year compounded*. There is a phenomenal amount of new build around here, though.

*if you allow for the mortgage interest and the LTV, the return is just about zero in nominal terms, and negative in real terms.

 

[MrGrumpy]

I suppose its all relative, but I saved 10k earning a fiver an hour and bought a wee starter home for 36k in 89, when all my mates were buying flats for 25 to 28k. I just checked, and the same house sold for 90k 18 months ago, so still not out of reach of any young couple.

£32k flat down Easter road , sold for £35k 4yrs later in 95 . We needed the profit and savings we had to buy the next house . If we could afforded to keep it on , we would have had a nice nest egg . Think they are going for circa £160-170k now .
That however highlights Edinburgh house prices !

 

[MrGrumpy]

Don't get me wrong, we sold our 36k house for 45k 3 years later, bought one for 68k and sold it for 175k 18 years later. It was renovated twice in that time, and was sold with a new roof and cracking big driveway, but still not a bad return.

Its a bit like fishing, some people only tell you about the good times.

To continue but our third property in 1999, it was a bankruptcy one so , got a good deal needed lots doing and at the time , properties were not really moving much . Think we offered the offers over price , not a penny more. 19yrs later that same property was worth about £180k more then We paid . It’s probably upto about £280-290k now as we sold it 4yrs ago .

 

[Gwylan]

A thread to help me and others navigate the current choppy waters in the mortgage market.

So let’s hear tales of any renewal quotes, and how you will cope. I could afford a few hundred pounds increase but anything more would be a real struggle.

My mortgage renews in November 2024. I was hoping rates would fall by then, but it looks like they will remain high until at least 2025.

I know “high” is a relative term.

I have lived here for 18 years but I couldn’t currently afford to buy the house I live in if I was 20 years younger and had to buy it for current prices. Which is a major issue with the current housing market.

The core issue, I think, is that people were deluded into believing that they could make a fortune by buying their own home.
That unleashed forces that are reflected in the present situation.
Fiscal probity and individual responsibility seem to have been ignored.

 

[bonzobanana]

The core issue, I think, is that people were deluded into believing that they could make a fortune by buying their own home.
That unleashed forces that are reflected in the present situation.
Fiscal probity and individual responsibility seem to have been ignored.

I think for many buying your own home is just satisfaction from owning your own home plus the knowledge that the monthly payments almost always become less and less over the years compared to renting. So a little pain at the beginning can be a much better lifestyle later on with a big increase in disposable income. Also it is definitely not a bad thing to have a major asset like a house. Some people have used the high values of their homes to pay for emigration to other countries where property is a fraction of the price, maybe retirement to a warmer country.

Home ownership seems to be declining it was 73% in 2007 but was about 62% in 2021 and the current situation in 2023 could well drop that into the higher 50s.

 

[Electric_Andy]

What worries me is....you may have bought a house for 50k in 1990 and sold it for 300k in 2022, but then you've still got to pay an inflated price for your next home. It only works out as profit if you downsize either by smaller house or less desirable area. It still looks to me like if you are moving house into like-for-like then you only stand to lose money

 

[gbb]

What worries me is....you may have bought a house for 50k in 1990 and sold it for 300k in 2022, but then you've still got to pay an inflated price for your next home. It only works out as profit if you downsize either by smaller house or less desirable area. It still looks to me like if you are moving house into like-for-like then you only stand to lose money

Precisely, I always said these prices are bad for almost everyone. If I can sell mine for 10x what I paid, what good is it if I have to then spend mimimum 12x to slightly improve the location when wages havnt even remotely kept up. The only time you will ever realise that profit is if you downsize massively or sell up and emigrate.. or die...and then you won't benefit at all anyway.
It's pie in the sky money, everyone would benefit massively if prices were half what they are now imo.