Well the last 12 interest rate rises didnāt work, but Iāve got a good feeling about this one.
3 Likes
Iām glad theyāve gone for a bigger increase as painful as it will be. Rate rises take time to have an effect and this should accelerate things, hopefully. I think the BoE needed to make a bit of a statement, too.
2 Likes
No more QE in our lifetime imo
The majority of mortgage owners aged 30 - 45 will get a lodger, or partly convert their property to get a lodger for 2-5 years. These mortgage owners will also push heavily for pay rises twice a year.
For 30-40 year olds who are yet to purchase a property, considering Portugal, Spain or another great location with incredibly well priced properties may be a great option to ride out 5-10 years.
A property fall in the west would likely only really happen once all paths have been exhausted and ridden to the highest lengths and only then would the cracks fall through.
Tens of thousands of mortgage holders could take in a lodger or two, family could help out, grandparents could help out, mortgages could be extended, mortgages could switch to interest only and also be extended, people could aim for higher paying positions, pay rises could keep comingā¦ thereās a variety of things which will take place for many years before a rare property market crash could take place, and by that time peoples pay may have risen faster than property prices and begin to catch up again, just like in 2019 when pay was getting extremely close for a generation of people to buy property, then cue the response to the pandemicā¦ perfectly timed response when the west seemed to crave some kind of decade event that always seems to come.
This is now hunting ground for cash rich buyers looking for long term property & land accumulation. Go take a look at the more elite areas of southern UK like Glastonbury, Surrey and now upcoming areas of Hampshire - there are solo property projects and desirable property renovations taking place all over. The stock market gains are being taken and pushed into hard assets. Itās a thriving time to be cash rich.
The real question is what do 25-40 year olds do who have not got into a property suitable for their lifestyle? Personally Iād say youāve been absolutely wrenched by the government, the Bank of England, the education system, the financial system, so one of the options Iād take is to completely change my own actions and where I spend money and completely sacrifice anything that does not align with my current target to get into a property to be proud of.
Bye bye tv licence, bye bye Waitrose, bye bye AA breakdown cover, bye bye Ā£15pm sim hello Ā£8pm sim O2, bye bye Ā£2.49 bottles of water, bye bye fast foodā¦ money and where you spend it should become sacred.
Replaced with picnics, tennis, bike rides, always bring your own waterā¦ completely stop spending even Ā£2 in a misplaced way.
This is a monumentously overly expensive period and I am not going to go into the cause because I know the causes I REALLY know whose failing & who has failed the country but like I said above, completely change even the smallest of actions and simply help to make certain things in the uk panic and fail, your money is yours and should not easily be extracted from you. During this period.
7 Likes
Really? I donāt agree with this at all. Unless people are purchasing far larger properties than they need, I canāt see it happening. My wife and I are in our early 30s with an 18-month old. We live in a 2-bed maisonette where the second bedroom is part-nursery, part-home office. Granted weāre in SW London where property prices are insane (and getting worse), but for us to get a 3-bed terrace with no more living space than we have already, weād be looking at Ā£900k and up. That would be an extra ~Ā£300k on the mortgage, and no lodger is going to cover that cost, and clearly we canāt have one now.
We were fortunate that I secured a 5-year fix at 3.19% shortly before the now infamous āmini-budget. It was already likely that weād have to sell up and move somewhere cheaper if we wanted a larger place, but now itās a dead certainty (unless rates drop significantly in that time, which I canāt see happening).
3 Likes
I said bye bye to many of these things years ago. I get water from the tap, Ā£10 per month phone bill, no netflix, no spotify, no other subscriptions. My only direct debits are mortage, council tax, sim only phone bill, and utilities. Nothing more. Everything else like car insurance (down to one car since pandemic) I pay yearly and use cash for shopping once a week at aldi.
It does mean that I have a larger disposal income to try to commit to 20k per year to my ISA and overpay as much as I can on my mortgage before my fixed rate of 1.9% ends in two years time.
5 Likes
Respect the frugality and it goes down to individual preference, but if you can afford to enjoy the fruits of your work in the present why not do so a little. Nothings guaranteed, certainly not returns on investment
1 Like
You say this, and SO many people tell young people to āstop buying takeaways and coffeeā.
Im 34, I have struggled to buy a property. I still rent, and have done since I moved out at 17. I donāt visit codfee shops, I shop at Morrisons and never buy brands, always supermarket own products, I never buy bottled water mainly because tap water is absolutely fine and have never seen the point in buying bottled water, I donāt have Netflix/Disney Plus/any other subscription services sinilar, I never buy takeaways, my lights never turn on in the evening to save electricity, water useage is minimal, the food I eat is minimal.
All of this, and I still donāt have enough to save for a deposit. All of this and I still donāt have enough to save for a rainy day. All of this and yet even though Iāve regularly been paying rent for 14 years with no issues at all, the banks still wonāt lend me money to buy a property. Wages against house prices are ludicrous and we need a big property crash.
Apart from winning the lottery, for some people, there is literally not much else we can do.
6 Likes
Whatās your reasoning behind this comment? Seems that any challenge people have these days is the fault of anyone but themselves.
I would like to come to Waitroseās defence! I switched from Tesco and actually my weekly shop is slightly less than what it was. Yes they do some very pricy items but their essentials range is brilliant quality and comparable with other supermarkets price wise. They also have significantly more offers than other supermarkets and as long as you watch what you buy I donāt think itās more expensive. Aldi/Lidl no one can compete but to me the major larger supermarkets are all comparable price wise now.
Also, if you have insurance with vitality you get cashback with Waitrose, which is an added bonus and no stock issues, you go to Tesco and there are empty shelves everywhere, doesnāt happen with Waitrose. The staff also seem much happier and better paid, so I would rather support a business treating their people well.
6 Likes
To be fairā¦ London and anyone living in it doesnāt count. Itās itās own world separate from the reality of the rest of the UK. The advice and scenarios are never going to apply to London.
1 Like
Sounds like you need a new job. The advice of cutting down is always good, but alone it doesnāt really give a good strategy to get a house. Your income and location play a big role and your willingness to plan ahead imo is the difference between getting places and not.
Iāve seen quite often for example people who are struggling to save for a house and you can ask them where are they in their career, whatās their next promotion. And often they havenāt thought about it, or their answer is there isnāt a promotion, theyāre at the top and only making 26k a year. That is the definition of a dead end job, and for those people they need to plan a career change.
Itās not just about cutting costs. Career planning and setting goals I think is mandatory these days
6 Likes
Being blunt you need to raise your income either by finding a better job, or by moving company for a pay rise.
3 Likes
Keep at and youāll get there. I bought my first place on a pretty modest salary. You do have to curb your expectations though. You aināt buying no three-bed house straight off the bat in most parts of the UK.
Aside from growing your salary ā make sure youāre taking advantage of all the āfreeā money out three such as 25% in a Lisa, min-maxing savings (eg dripfeeding into regular savers) and switching offers. I added more than Ā£1,000 to my deposit just by switching banks. Stoozing is also looking like an increasingly attractive option.
I shouldnāt need to just āget a new jobā just for money. Im someone who is perfectly happy in the role and industry I am working in. I love my job, and to me it isnāt just a job, itās my career.
The system needs to change. Why am I āfinancially stableā enough to have paid rent since I was 17, every single month without fail, even when I was made redundant years ago, yet the bank sees me as ānot financially stableā for a mortgage with mothly payments 30% less than Iām paying now?
Itās not my job which needs to change, itās the attitude.
9 Likes
The main issue placed into a nutshell is that people are up against other people who are trying to win. The humans considered at āthe upper levelsā are constantly trying to stay ahead of the ones wishing to level up. Nobody ever really states this in plain language.
There is a silent competition which means in times like these you need to make it as tough for your opponents as you can whilst making actions which do not let them run away with the prize whilst also getting closer to what you want to achieve.
All these comments by politicians, by media, by teachers, by whoever - most of it is complete BS. You have to silently fight back with changing your actions and trying to level up yourself whilst not letting the already asset rich or wealthier take your money.
Itās a competitive game.
Look at the people right now who own their assets outright, the actions you make today should not be benefitting those people even more, otherwise youāll be moving further back in the game.
In times like these you should spend money in the mom & pop stores, not the Co-ops or Tesco express. Levelling up means you all making different decisions on where each pound spent goes.
1 Like
(for the most distracted)
Wagner military coup. Is the war over then?
2 Likes
I meanā¦ I do get where youāre coming from donāt get me wrong. But loving your job is irrelevant if your employer isnāt giving you pay rises and/or there is no career progression.
As you gain skills you should be going up the career ladder, either within your current employer through good pay rises and promotions that reflect your increasing expertise, or by changing employer periodically (usually a mix of both).
Thereās no reason you shouldnāt be getting a 5-10% pay rise at a minimum every year or two.
From the banks perspective if your unable to save 15k for a deposit, how are you going to afford a new roof or major repair?
4 Likes
An interview appeared today stating that it is great news for everybody that the government and banks are trying their hardest to keep the inflated property prices up and carry on as normalā¦
Am I the only person immediately thinking āhow is that great news for everybodyā?
Properties being 9-11 times average wages is a great thing for everybody?? Adding in 6% 7% 8% and maybe even 10% mortgage rates to those already inflated prices?
This is the most rigged market that could ever be created. There literally is no market - it is simply a rigged playground for the wealthy.
2 Likes
Good point - when renting a lot of expense is on the landlord, once you own a house youāre on the hook for everything.
Same trade off with your job - do you do a job you love for the Ā£s or one you hate ( like many ) for the Ā£Ā£Ā£s ?
5 Likes