House Prices

[mindlessness]

The media here (Australia) does lots of Millennials v Boomers stuff (which I dislike immensely) but it is interesting comparing:

OK Boomers, who had it easier?

It’s a battle for the ages – with Baby Boomers and Millennials pitted against each other.

www.news.com.au

Wages not increasing while property prices have (by a lot) sucks.

 

[Yel]

I'll post it again on this thread, UK house prices Vs wages graph.

Low interest rates aren't helping, unless you want to help prices stay high. That suits financial institutions, the 1% and the huge amount of PM's who have got into buy to let. It doesn't help the normal person.

 

[Lanavalentine]

I can’t see interest rates rising significantly anytime soon, although I’m far from an expert. Uncertain economy and low inflation means there is little impetus for a rise in interest.

However, saying that, I think anyone who is paying a mortgage should be wary. Although we don’t get any decent returns on our savings, we still save like mad, simply because we want to be used to not living on that money if interest rates were to suddenly rise and increase the cost of our mortgage. We are very fortunate to be able to do so.

I worry a tiny bit for anyone who’s stretched themselves for a mortgage while interest rates are low, as we’re moving into such uncertain times now. I don’t think anything will change, but like I said, I’m far from an expert and the type to always err on the side of caution when it comes to finances.

 

[Anne1448]

The media here (Australia) does lots of Millennials v Boomers stuff (which I dislike immensely) but it is interesting comparing:

OK Boomers, who had it easier?

It’s a battle for the ages – with Baby Boomers and Millennials pitted against each other.

www.news.com.au

Wages not increasing while property prices have (by a lot) sucks.

I visited a place in the West of Ireland and it was priced at 175.000€. I went on the Property register to see what was the original price and the owners bought it for 50,000€. Mind you they haven't changed a single thing in the apartment in the last decade. The location has fishing jobs only, there are no transportations and the nearest town is more than 30 minutes away.

Now, if someone can explain how an apartment can be 250% more expensive in ten years, I am listening.

 

[heretoreaditall2019]

is paying a mortgage should be wary. Although we don’t get any decent returns on our savings, we still save like mad, simply because we want to be used to not living on that money if interest rates were to suddenly rise and increase the cost of our mortgage.

See this is an interesting conversation! Agree completely, beyond an emergency fund I’m seeing increasingly less point in amassing cash savings beyond that and mid term stuff (eg if you were saving for a kitchen or something). So we’re splitting it between overpaying the mortgage (and hopefully finishing it in a decade, if neither of us have a breakdown in the mean while), investments, and then crypto. Crypto is risky and I know a hot topic lots of ppl disagree on but I can’t see how you can get any remarkable returns on anything anymore, it’s potentially the only equaliser for the generation(s) that missed out on the insane property boom.

Then with baby - we’re contributing steadily to max out her NS&I but everything outside of that is going into crypto. So something that’s very safe then something utterly chaotic

 

[JoeBloggs]

I can’t see interest rates rising significantly anytime soon, although I’m far from an expert. Uncertain economy and low inflation means there is little impetus for a rise in interest.

However, saying that, I think anyone who is paying a mortgage should be wary. Although we don’t get any decent returns on our savings, we still save like mad, simply because we want to be used to not living on that money if interest rates were to suddenly rise and increase the cost of our mortgage. We are very fortunate to be able to do so.

I worry a tiny bit for anyone who’s stretched themselves for a mortgage while interest rates are low, as we’re moving into such uncertain times now. I don’t think anything will change, but like I said, I’m far from an expert and the type to always err on the side of caution when it comes to finances.

I wholeheartedly agree and support the current legislation that means when taking out your mortgage, you need to be able to afford it if the rate rises by approximately 7%. However if people’s circumstances have changed or they have committed their income to other means since being granted the mortgage that is irrelevant.

I doubt the interest rates will increase much if at all because of the economy tanking. We’re on 2.1% and I expect it to drop slightly when we remortgage.

I’m a huge saver and am looking to pay off the max 10% each year and possibly move to a savings mortgage to eventually pay it off but I haven’t looked into it much yet as we have a year to go until we need to.

 

[Lanavalentine]

See this is an interesting conversation! Agree completely, beyond an emergency fund I’m seeing increasingly less point in amassing cash savings beyond an emergency fund and mid term stuff (eg if you were saving for a kitchen or something). So we’re splitting it between overpaying the mortgage (and hopefully finishing it in a decade, if neither of us have a breakdown in the mean while), investments, and then crypto. Crypto is risky and I know a hot topic lots of ppl disagree on but I can’t see how you can get any remarkable returns on anything anymore, it’s potentially the only equaliser for the generation(s) that missed out on the insane property boom.

Then with baby - we’re contributing steadily to max out her NS&I but everything outside of that is going into crypto. So something that’s very safe then something utterly chaotic

Interesting! Crypto terrifies me!

Unfortunately with our mortgage terms we cannot overpay it yet, but equally it is low fixed interest while we can’t overpay it, so I suppose I am over-cautious in saving extra in lieu.

We’re currently looking for a good IFA to see what we can do instead of just endlessly saving for low return. It’s all quite intimidating for me, coming from such a modest financial background. I suspect that’s what makes me overly cautious, too, but I don’t think that’s a bad thing.

I wholeheartedly agree and support the current legislation that means when taking out your mortgage, you need to be able to afford it if the rate rises by approximately 7%. However if people’s circumstances have changed or they have committed their income to other means since being granted the mortgage that is irrelevant.

I doubt the interest rates will increase much if at all because of the economy tanking. We’re on 2.1% and I expect it to drop slightly when we remortgage.

I’m a huge saver and am looking to pay off the max 10% each year and possibly move to a savings mortgage to eventually pay it off but I haven’t looked into it much yet as we have a year to go until we need to.

Yes, absolutely!

I do feel like it it a vicious cycle for some though. They stretch to afford a mortgage because house prices are so high, and then they may well end up totally fucked if interest increases?! Hopefully anyone who is stretching has locked in their low interest rate to help protect them.

 

[heretoreaditall2019]

Interesting! Crypto terrifies me!

Unfortunately with our mortgage terms we cannot overpay it yet, but equally it is low fixed interest while we can’t overpay it, so I suppose I am over-cautious in saving extra in lieu.

We’re currently looking for a good IFA to see what we can do instead of just endlessly saving for low return. It’s all quite intimidating for me, coming from such a modest financial background. I suspect that’s what makes me overly cautious, too, but I don’t think that’s a bad thing.

It scared me too at first and you unfortunately really do have to read and listen to a lot of content but that’s the only real barrier to entry tbh, and be careful as there’s scammy tit out there too. The most useful thing I found was a Reddit post about market caps which calculated the reasonable max each coin could reach, although tbh I just stick to the same few and pray. I should be more active at buying & selling, we do stake ours, but I’ll get into that when I’m back off mat leave and can mess around on a computer for hours on end again. We only put money in it that we wouldn’t be gutted to lose, obviously it’d be tit to lose anything but not catastrophic to our quality of life? Worryingly it’s probably most like to gambling for us. Minimum buy ins are so low too (I think £25 using Binance?) that you can just play about with it until you start feeling confident enough to put more in. Obvs if you’re at all that way inclined!

You’re right though it is bleak and there seems no hope to combatting it. Do you have a stocks & shares ISA or investment account? I invest in a group of different funds and they always see decent returns, obvs capital is at risk with those but if you see it as a 5 year minimum + do a little research so you’re making informed choices then you should be fine IMO.

 

[Lanavalentine]

Yep @heretoreaditall2019 one of our ISAs is stocks & shares, although my partner is the one who manages that one. I’m going to read up on Crypto. Thanks!

 

[hollowcrown]

Crypto is a bad idea to put money into unless you really really know what you are doing, which most people don't.

Interesting! Crypto terrifies me!

Unfortunately with our mortgage terms we cannot overpay it yet, but equally it is low fixed interest while we can’t overpay it, so I suppose I am over-cautious in saving extra in lieu.

We’re currently looking for a good IFA to see what we can do instead of just endlessly saving for low return. It’s all quite intimidating for me, coming from such a modest financial background. I suspect that’s what makes me overly cautious, too, but I don’t think that’s a bad thing.



Yes, absolutely!

I do feel like it it a vicious cycle for some though. They stretch to afford a mortgage because house prices are so high, and then they may well end up totally fucked if interest increases?! Hopefully anyone who is stretching has locked in their low interest rate to help protect them.

This is the worrying thing really. I know a lot of people jumping into buying houses as soon as they can with new partners when they are jobs that I know pay far less than mine. Either they have the secret "help" which no one likes to speak about on social media or they are not prepared for interest rate rises at all.

 

[Lanavalentine]

This is the worrying thing really. I know a lot of people jumping into buying houses as soon as they can with new partners when they are jobs that I know pay far less than mine. Either they have the secret "help" which no one likes to speak about on social media or they are not prepared for interest rate rises at all.

Yes, I see this sometimes too. It’s like our society & media has elevated the idea of home ownership to be the ultimate goal, when in reality, a fair percentage of people right now would probably be better off focusing on pensions and emergency funds first. (Although I’m aware it’s probably very easy for me to say that as a home owner)

Also, I certainly hope the “just work harder and spend less” crowd are well prepared for potential interest rate rises too…

 

[heretoreaditall2019]

Also, I certainly hope the “just work harder and spend less” crowd are well prepared for potential interest rate rises too…

And the people that stretched themselves to make use of the stamp duty holiday. I only know 2 people that moved during that time but 1 has lost hair because she was so stressed her app wouldn’t go through before the deadline (that was then extended) cos she couldn’t afford it otherwise, the other has moved into a dive and can’t afford to drop a day (20% pay cut) so god knows how they’ll fix it up? Both me and my husband have been seriously unwell at points in our lives so unpredictable tit really does happen, you just can’t guarantee being at 100% of your current earnings for decades.

 

[hollowcrown]

Yes, I see this sometimes too. It’s like our society & media has elevated the idea of home ownership to be the ultimate goal, when in reality, a fair percentage of people right now would probably be better off focusing on pensions and emergency funds first. (Although I’m aware it’s probably very easy for me to say that as a home owner)

Also, I certainly hope the “just work harder and spend less” crowd are well prepared for potential interest rate rises too…

Yeah it's the social media flex lifestyle. A lot of people making them Instagram acounts for renovations of their houses and pictures of plants and freshly painted walls. House owning and showing it off is very aspirational.

Part of that is landlords fault. If they let you act like an actual adult and paint the walls, put a shelf up or some artwork and kept the place in good nick I don't think we'd really need to aspire to home ownership. Similar with stability and stuff - it's good to know you're not going to be kicked out every time the lease needs to renew.

As it is I just want to put some guitars on the wall of my bedroom, it isn't much to ask.

It is very important to remember that you never see the full story - if someone's got a ton of inheritance for instance or getting given money by their parents. A close friend to mine got a flat but receiving a huge chunk of inheritance money to slap down on a big deposit, but that wasn't in any of the social media posts at all.

 

[JoeBloggs]

A lot of is for show too. We could easily move, make £100k on our house and buy something quite special. But I enjoy our current disposable income, I like our home and our area (we had to move 20 miles to buy) but the likes of my cousin, he’s just had a £35k increase (madness!!) and she’s moved up a band in the NHS. They are late 20s and looking to buy a £900k house, I can’t believe for one second they can actually afford it but like their parents that doesn’t really matter. Even if I could afford that, that debt, maintenance and possible interest rise, no thank you!

 

[HoGi]

A lot of is for show too. We could easily move, make £100k on our house and buy something quite special. But I enjoy our current disposable income, I like our home and our area (we had to move 20 miles to buy) but the likes of my cousin, he’s just had a £35k increase (madness!!) and she’s moved up a band in the NHS. They are late 20s and looking to buy a £900k house, I can’t believe for one second they can actually afford it but like their parents that doesn’t really matter. Even if I could afford that, that debt, maintenance and possible interest rise, no thank you!

I'm much the same.

We moved 15 miles away to the next big town along. We bought a 3 bed detached and have done it up as it was a tit hole when we got it 4 years ago. We still need to do the bathroom and kitchen (both have had mini glow ups) but we were debating move or do them big jobs.

When we are looking at what's around the prices are astronomical and even with what we have made on our house, to go up to a 4 bed detached would be a huge increase in cost and I enjoy my disposable income.

In the town we left, my friend has just paid 500k for a 3 bed semi new build...half a mil and shares a wall

 

[Yel]

I doubt the interest rates will increase much if at all because of the economy tanking.

They maybe forced to rise with inflation running very high. When the us starts to raise others maybe forced into it.

Economists predict at least two US interest rate rises by end of 2023

Inaugural FT-IGM survey of academics points to messaging challenge for Federal Reserve
Elevated inflation will compel the Federal Reserve to raise US interest rates at least twice by the end of 2023, according to a new poll of leading academic economists for the Financial Times.

 

[Lanavalentine]

Again, not any kind of expert, but my motto regarding finance right now is “prepare for the worst and hope for the best”.

We’re definitely entered into a period of uncertainty. I wouldn’t want that to bite me on the arse. Hope the “just spend less” are paying attention (soz can’t resist the dig )

 

[mindlessness]

Yeah, I have a few friends buying here in Australia at the moment (late 20s/early 30s, buying homes rather than investments) and I'm not exactly tempted to join them. House prices are going up at the moment and I feel like I'm just watching and waiting for an inevitable drop

 

[hollowcrown]

Pay rise is approved of this month, doubt it will be enough to get a mortgage though. Maybe not even nans inheritance will help/

 

[mindlessness]

Pay rise is approved of this month, doubt it will be enough to get a mortgage though. Maybe not even nans inheritance will help/

Congrats on the pay rise! But I'm sorry about the mortgage It sucks.