Have we got a housing problem in this country?

Question

I am worried that the recent and expected future increases in the cost of borrowing will hit me hard, as I have a reasonably large mortgage.

Are we trying to control inflation by adjusting the interest rate, to control house prices, which if they spiral out of control, will mean larger wage demands and drive up inflation.

Surely we should be controlling immigration and making more housing available (making more building land available), this will reduce demand and therefore prices, and save us all having to pay more for our mortgages (as the BoE increases interest rates to keep prices in check).

If the BoE keeps putting up interest rates, we'll all demand higher wages anyway, to pay the mortgages we already have!

Answer 1

The problem we have is with the tossers who've flooded the market with two bedroomed flats and sold 'em to greedy b*stards for investment. There is a lack of 3 bedroomed family houses and the prices are, as you point out, becoming unrealistic.

It's nothing to do with immigration, it's to do with houses becoming investments and small businesses without any decent control from the government. I don't have a problem with this investment in theory, but I beIieve that working families should be able to have affordable property available. This isn't the case any longer as a small minority are cleaning up. I'd hate to be just starting out on the property ladder now.

No offence but I hope the whole market goes pop to be honest.

Answer 2

Everyone is in a jam in this country, one way or another. I could tell you to downsize to relieve some pressure, but that would be avoiding the issue eh.

Pointing the finger at your fellow man is not the answer. Together we stand, divided we fall. I could point the finger at you for being worried about your large mortgage, you have a roof over your head, you can downsize, you have options. There will be allot of people sleeping rough this xmas who have no options. So give them an option by controlling immigration? Walk up to someone who is sleeping in a doorway and ask them if controlling immigration is the answer! They would probably say they are the victim of a materialistic society, not of immigration laws......the fact is that we all have our crosses to bear, and they are getting heavier and heavier. Rather than attack your fellow man ask yourself if the 66% pay rise that the politicians want could not be put to better use, like housing.

Answer 3

Yes, there is a problem with affordable housing in the UK, which has forced people into rented accomodation and/or out of their home towns/cities. Immigration does have some contribution but the biggest problem are those "buy to let" parasites. The government needs to hit the investors hard, whilst filtering out those who genuinely need to let a property (e.g. someone moving in with a new partner and wanting to test the water before burning their bridges).

If you are worried about the cost of borrowing, then you really need to change your mortgage for a fixed rate one. Talk to your lender and see if there any fixed rate deals inhouse which may lower the costs of moving your mortgage. Also compare it with fixed rate products elsewhere.

Answer 4

As you pointed out, there is a domino effect...higher interest rates to keep inflation in check, which causes higher borrowing costs, which causes demands for higher wages, more wages means more consumer dollars and we start all over again.

So, I suggest that we freeze-frame the economic cycle and just examine it at one point in time. In light of this approach, you can't really then compare tomorrow's higher interest rate to today's income. Looking at just today, it appears many meet the obligations and needs (or as well as we ever have). In other words, I don't see any need for concern greater or less than at any other freeze-frame point of analysis.

I would point out that you COULD consider this economic cycle...interest rates go up to keep prices in check (YOU AND I BENEFIT)...and wages go up (YOU AND I BENEFIT), giving us more consumer dollars to spend (YOU AND I BENEFIT).

What was missing in this economic cycle compared to your example? Right! This model doesn't borrow, go in debt, or use credit...we pay as we go. It is amazing how much a) your buying will increase and c) how boring this topic will become to you.

STOP GOING IN DEBT and the system works a lot better for all of us. You are only, in essence, worrying about your ability to borrow in this post. Shame on you! Statistics show that people are buying 50% larger homes with 25% fewer people in them. No one should be concerned about interest rates, wages or such until we all learn to reduce our demands for luxury and start sharing what we do have with others. Then, come back and post about climbing mortgage rates.

Answer 5

pre budget report suggests prices will keep rising as provision 4 increased supply is smaller than current growth in demand, the rate of growth in demand is likely 2 increase and building new houses is likely 2 b slow as these things always miss deadlines + cos house builders get lower margins on cheaper houses they will resist.
There is some hope for greater supply from conversions but rising rates will reduce this.
Also REITS will increse demand 4 real estate cos of tax benifits.
Therefore i think house prices will continue to rise.

Answer 6

Building more homes is not solve the interest rate issue. There is already excess inventory, evidenced by the huge number of vacent houses on the market.

The future cost of borrowing will not hit you hard if you choose not to do it. Huge mortgages are life options that people choose for themselves.

Answer 7

Of course we have a housing problem in America. Just visit downtown DC at night and you'll see how bad it is. There are homeless people everywhere!

This goes much deeper than whether or not a person can afford their mortgage. There are people who can't afford their rent and are forced to live in shelters or housing that is very inadequate and oftentimes, deplorable.

Answer 8

I agree about the immigration, we should be controlling illegal immigration but the cost of houses are going down at the moment. It's reached it's peak.

Answer 9

I think you should just sit back and enjoy everything this government has given you all these years.

If you are going to moan about it, then get up off your fat a**e and do something about it. If your not happy then change the situation.

Answer 10

Yes we do have a problem, thanks to Blair letting in all these immigrants, what the hell was he thinking of, certainly not the people of the UK.