So how do you (and your family) intend to ‘hold you nerve’?

Well I'm not plannng on opening up my skin to find one to hold 😏 He, non of them are in the real world.

No mortgage with me. Cost of living still biting.

My eldest fortunately locked in to a new deal last October. The family on.my DiL side mortgage/ins broker advised him to get it sorted early.

They are well off as my son in software development which is a high paying job. They aren't struggling but still noticing the cost of living is knocking down spare income

My other 3 live abroad. My youngest works for a bank so has a very low interest rate anyway as its special deals for Bank employees.

My daughter and her partner are in rented living abroad. Rrnts are more reasonable where they are in Canada.

My other son lives in Thailand teaching and is OK

Is there an answer? … other than going all Guy Fawkes on them all?
It’s a true shitshow.

growstuff

Norah

Callistemon21

This is worth considering:

In 2022/23 the government of the United Kingdom is expected to spend approximately 15.4 billion British pounds on housing benefits
Stastista

This £15.4 billion is in fact buying properties for landlords (I use the term generically).

How much social housing could be built with this £15.4 billion?

In what location?

"About 35,000 homes are planned by 2026, paid for by £4bn of government funding - an average of £114,000 per house." (in London, I believe)

£114,000 won't build much of a house in London.

growstuff £114,000 won't build much of a house in London.

I've no idea, I merely quoted an article.

I assume land cost is not part to build cost, in this quote.

My husband doesn't use land cost as a part to business costs (on a yearly basis, only at purchase) perhaps that's normal.

I remember 16% interest. I'd just bought out my ex and had a huge (for the time) mortgage. I had to work agency nights at weekends and have a houseful of students as lodgers just to make ends meet. There was also MIRAS if anyone remembers that! These days young people live in smaller houses and don't always have room to do this sort of thing, plus there are more restrictions on letting and tax implications. I feel very sorry for families who are suffering from this. I think it's all very well to ask people to hold their nerve when you are used to spare cash on the bank, a full larder and plenty of clothes in the cupboards but many live from paycheck to paycheck to service mortgage debt, childcare and basic living costs already. Many landlords with a mortgage are likely to have no option but to increase the rent to cover the extra interest - in many circumstances they can't claim mortgage interest against tax, so again ordinary families suffer. I remember the autumn I had to buy school shoes and football boots every couple of months as my son had growth spurts and imagine how dreadful the budgeting decisions are going to be even for the reasonably well off. After austerity, followed by soaring fuel costs people have worked through any savings they may have built up. Now water bills are set to rise in order to clean up their filthy messes in our rivers and coastlines, having creamed off profits for years to pay the shareholders and management ahead of investing in a good service. The sooner this government gets kicked out the better.

Years ago, our financial adviser told us that the best advice for long-term investments is to trust that the money markets will pay up in the end - ie ‘hold your nerve’.

Unfortunately, this is the sort of advice that works if you have spare money to invest, rather than needing a house to live in.

Rishi doesn’t seem to have a clue what life is like for most of us, he’s like a caricature of an out-of-touch millionaire.

In the early 90s it nearly hit 15%

We are so lucky to be mortgage free now and three of our five adult children still live with us () but our elder son is desparate to get into the property ladder and our eldest daughter is lucky as she and her partner have very well paid jobs and just one child.

I bought my first property alone in the early 80’s and had to have one full time job and one part time job.

I think mortgage rates alone would be easier to “ride out” but difficult to “hold your nerve” when everything is so much more expensive and if you’re a public sector worker having had to live through “austerity” for no good reason at all !!

growstuff

Norah

Callistemon21

This is worth considering:

In 2022/23 the government of the United Kingdom is expected to spend approximately 15.4 billion British pounds on housing benefits
Stastista

This £15.4 billion is in fact buying properties for landlords (I use the term generically).

How much social housing could be built with this £15.4 billion?

In what location?

"About 35,000 homes are planned by 2026, paid for by £4bn of government funding - an average of £114,000 per house." (in London, I believe)

£114,000 won't build much of a house in London.

I suppose a lot of the cost is the land and if an LA already owns the land, that would cut the costs.

Norah

Callistemon21

This is worth considering:

In 2022/23 the government of the United Kingdom is expected to spend approximately 15.4 billion British pounds on housing benefits
Stastista

This £15.4 billion is in fact buying properties for landlords (I use the term generically).

How much social housing could be built with this £15.4 billion?

In what location?

"About 35,000 homes are planned by 2026, paid for by £4bn of government funding - an average of £114,000 per house." (in London, I believe)

£114,000 won't build much of a house in London.

growstuff

Callistemon21

This is worth considering:

In 2022/23 the government of the United Kingdom is expected to spend approximately 15.4 billion British pounds on housing benefits
Stastista

This £15.4 billion is in fact buying properties for landlords (I use the term generically).

How much social housing could be built with this £15.4 billion?

Indeed!

I realise that some of the housing benefit will be going towards renting social housing, so it's not that simplistic.

Although there appears to be a huge number of new houses being built all around the country, I'm not sure how much is affordable or social housing.

Callistemon21

This is worth considering:

In 2022/23 the government of the United Kingdom is expected to spend approximately 15.4 billion British pounds on housing benefits
Stastista

This £15.4 billion is in fact buying properties for landlords (I use the term generically).

How much social housing could be built with this £15.4 billion?

In what location?

"About 35,000 homes are planned by 2026, paid for by £4bn of government funding - an average of £114,000 per house." (in London, I believe)

Callistemon21

This is worth considering:

In 2022/23 the government of the United Kingdom is expected to spend approximately 15.4 billion British pounds on housing benefits
Stastista

This £15.4 billion is in fact buying properties for landlords (I use the term generically).

How much social housing could be built with this £15.4 billion?

Indeed!

I agree that more social housing would be more beneficial than spending housing benefit on landlords mortgages and assets

Cautious!

We recently fixed at 5% and before we were offered the mortgage they made sure we could afford 10%. If you want a recent example of mortgage lending. We borrowed 3.5 times one of our salaries but we were offered more if we wanted. I think maybe people used to higher rates may have always been more cauity

This is worth considering:

In 2022/23 the government of the United Kingdom is expected to spend approximately 15.4 billion British pounds on housing benefits
Stastista

This £15.4 billion is in fact buying properties for landlords (I use the term generically).

How much social housing could be built with this £15.4 billion?

We'd been considering Equity Release for some time before the pandemic started and we decided to go for it in 2021 thereby releasing capital from the house for possible roof repairs/maintenance etc plus a bit of flexibility to help out DS and DD, both working within the NHS at that point, where necessary. The equity left in the house will be £50,000 minimum in 17 years time leaving us each with the amount we are allowed to keep if we should need residential care in the future. We could not have afforded the increases AT ALL and have not regretted our decision....so far...

We own a rental property (one day we may sell our home and move there), and have just renewed our term late last year. Our monthly payment went up quite a bit.

In BC, you are not allowed to increase the rent amount more than 2%, but our costs have increased 33%. We, as well as other rental property owners are at risk of losing money on a monthly basis. It turned out for us that we had one tenant leave, and another come in, so the rent was raised quite significantly to cover our costs.

I don't know what we would do if we had not had that change of tenants; most likely we would have had to sell. There may be quite a change in the rental vacancy rates as people try to off load properties they can't afford to keep. This may also drive down real estate prices, which will benefit younger people trying to get into the market (but at higher rates).

Mine was in 1982.

Don’t think this needs an explanation

growstuff

Casdon

Example 3.5 +1 x £50 k salary = £225k mortgage in our day
4.5 +4.5 x£50k salary = £450k mortgage young couple now
That is why so many people are concerned about small interest rate rises, because proportionately it it makes a big difference to their monthly outgoings if they have a mortgage which is at the top end of affordability for their salary levels.

Not sure when your "day" was Casdon, but my first mortgage was 2.75 x £6300 (and a bit) = £17,950 mortgage. When interest rates hit 16%, my salary had risen and the monthly increase was in tens of pounds, not thousands. I can't remember the exact percentage of my salary, but it was nothing like mortgage-holders today are about to be hit with as a percentage of their salary.

I was using todays average salary rounded up to make the maths easy for both equations, but my first mortgage was in the eighties growstuff. I think the 3.5 +1 year salary ratio lasted for quite a few years, it’s only in the last few years that people can borrow such a high salary denominator. I’m really glad nobody I know has extended themselves so much, but thousands will have done.

An expected result of our neoliberal economy.
Whilst our government is intent on pursuing this economic model we will continue to watch the rich get richer and the poor get poorer as we go headlong into recession. This will cause untold grief for millions.
If you want an alternative view have a look at Richard Murphy’s blog on Tax ResearchLLB.

Like many others of our age, we struggled back when the mortgage rate was 15% or whatever it rose too. We haven't had a mortgage for 15 years so I can't say we will struggle. I fear for the younger people like our daughter and son-in-law who work hard and will find it difficult. They have never asked for our help but of course we wouldn't see them in trouble.

BlueBelle

*My husband had a second job, was building his business, can be done*

Norah but not everyone has a husband that can take a second job or even have a husband

Thank you for noting that. I was noting what can happen.

I recall my grandparents taking about the price of houses and wondering how young people could afford to buy houses.

That was in the early 80s. Similar comment from folk in the early 90s

We had to really cut back in the early 90s and it wasn't easy but there wasn't the same level of hysteria in the press

Add to that social media and everything is an utter disaster . We talk ourselves into panic.