O/T Interest rate rise

[redrobo]

Just be grateful that although the increase in Interest Rate is the highest for 30 years to 3% when we got married in the early 70's the interest on our mortgage was a massive 14%.....

[thefactsman]

Just be grateful that although the increase in Interest Rate is the highest for 30 years to 3% when we got married in the early 70's the interest on our mortgage was a massive 14%.....

You probably didn't mind paying 14% interest when house prices were 65 times cheaper in 1970's

[Alan]

You probably didn't mind paying 14% interest when house prices were 65 times cheaper in 1970's

Not much of an accurate fact... a flat similar to one I bought in 1982 for £19k is available today for
£114k.... only 6 times as much.

[Scouseport_Shrimp]

Off the top of my head, when the mortgage interest rates were at their highest it was only the main wage earner who's annual gross pay was taken into account by the Lender. They also needed to prove a track record in regular secure employment.

This was at a time when marriage was the norm, when the female of the couple didn't work ie. was a stay at home mum, and if she did work or was of child bearing age her wage wasn't taken into account by the Lender.

In general you also had to have been saving with the Lender for a minimum of 2 years immediately prior to applying for a mortgage, and you needed a minimum deposit of [I think] 10%.

So taking the above into account [there were probably other stipulations] it wasn't easy to get a foot on the housing ladder, and certainly nowhere near as easy as it has been for the last 30+ years.

When I first bought in 1980 I had £zilch left at the end of every month for quite a long time, my only opportunity for a drink was to brew my own.

Surely ALL Borrowers know that very low interest rates couldn't last forever, and realise that at some stage the percentage rates could increase, and quite rapidly.

And what about Savers, they've had a very thin edge of the wedge for a long time.

[thefactsman]

Not much of an accurate fact... a flat similar to one I bought in 1982 for £19k is available today for
£114k.... only 6 times as much.

https://www.openaccessgovernment.org/uk ... 70/138813/

[Scouseport_Shrimp]

You probably didn't mind paying 14% interest when house prices were 65 times cheaper in 1970's

Not much of an accurate fact... a flat similar to one I bought in 1982 for £19k is available today for
£114k.... only 6 times as much.

Just checked my first purchase in March 1980 on Zoopla.

I Paid £20K.

It was last sold for £239K in 2018, and Zoopla's estimate for sale today between £284K and £314K.

[Alan]

Not much of an accurate fact... a flat similar to one I bought in 1982 for £19k is available today for
£114k.... only 6 times as much.

https://www.openaccessgovernment.org/uk ... 70/138813/

Fair play there factsman..but I'm going from personal experience not statistics.

From 1973 to 1993 the interest rates were usually 10% plus....and if 10 of 11 houses sell for £200k and the other sells for £2.4m then the average price is is £400k.

[Rob]

You also has significant tax breaks through MIRAS

House prices in 1970 were 4* average salary it's now 8*. If rates went back to 14% our reasonably under control mortgage compared to many of my contemporaries would be more than my take home pay in interest alone. It would put the entire under 50 middle classes below the poverty line.

Many of those who are trying to get on the housing lader will have student debt so a marginal tax rate of 50%


The wealth your generation has stolen from those behind is scandalous.

[Wild Bill]

Heard a lot in recent times about how a vote for a certain party would take us back to the 1970s. Now we have reached these depths, I wonder what the fear narrative will now be come 2024?

[Keith]

Just be grateful that although the increase in Interest Rate is the highest for 30 years to 3% when we got married in the early 70's the interest on our mortgage was a massive 14%.....

The issue is not simply the interest rate, it is how people will have borrowed. Many people had to max out their affordable borrowing in order to get on to the housing ladder in the first place. Any interest hike will be difficult. Add crazy inflation and oil companies making £8 billion profit per quarter, and many home owners will face genuine poverty.

Our first home was at the heights/depths of Thatcherism. We bought a property on Skerton that was a repossession. Our interest rate was 16% when we bought. I think it was 17% before rates began to fall. By buying at the peak, our repayments came steadily down. The couple who lived there before us had literally done a 'moon-light flit'. They had left quite a lot of stuff that they had been unable to carry with them. The cups were left, where they had their last brew before leaving. The repossession process took about eight months, so it sat empty for all that time... ...a loaf of bread in the kitchen barked at us when we entered, and couldn't be thrown out until we actually owned it! You can imagine how mouldy it was. They'd also left piles of paperwork, a trail of slowly sinking further in to debt. Using credit cards to pay utility bills... It was really very sad. The neighbours said they were a lovely young couple. But, they were slowly forced under.

Welcome back to those days.

[Scouseport_Shrimp]

The issue is not simply the interest rate, it is how people will have borrowed. Many people had to max out their affordable borrowing in order to get on to the housing ladder in the first place. Any interest hike will be difficult. Add crazy inflation and oil companies making £8 billion profit per quarter, and many home owners will face genuine poverty.

Don't forget the Covid Global Pandemic which has to be paid for, and not just in this country.....watch Al Jazeera News channel, it's hitting just about everywhere, sort of Global like.

What's your solution?

[Keith]

The issue is not simply the interest rate, it is how people will have borrowed. Many people had to max out their affordable borrowing in order to get on to the housing ladder in the first place. Any interest hike will be difficult. Add crazy inflation and oil companies making £8 billion profit per quarter, and many home owners will face genuine poverty.

Don't forget the Covid Global Pandemic which has to be paid for, and not just in this country.....watch Al Jazeera News channel, it's hitting just about everywhere, sort of Global like.

What's your solution?

Massively tax the oil companies on their excess (unexpected) profits. It should have been done a year ago. Suggesting they'd stop investing in renewable energy if their (unexpected) profits were taxed is complete and utter BS. We could (& should) have stopped importing Russian gas to Europe right at the start of the war. Russia's economy hasn't tanked (enough) because they are selling enough gas at an inflated price to fund the war. We'd possibly have faced power cuts, but we'd have done it during the summer months, rather than the winter ones which will be coming.

If the oil companies were told that any profits over the ones they were expecting, would be taxed massively (80%+) OR reduce prices for consumers, then they would stop their profiteering. May as well reduce prices if they'd simply be giving cash to the government. That, in itself, would have reduced inflation.

As always, the poorest people in society will suffer the most. A decade of austerity under this Tory government, and now we're heading for austerity Mk2, so the poor can pay even more.

[Phil Anderer]

Given the tax incentives the windfall tax that we have instigated is largely ineffective, particularly since even investment in gas and oil in the North Sea means Shell are paying sweet FA. If the tax incentives were limited to investment in renewables then we'd all be better off, as it would incentivise those companies to move away from fossil fuels.

[Keith]

Also have to remember that the renewable energy companies are creaming it too. The cost of wind hasn't increased!

[Potted Shrimp]

Also have to remember that the renewable energy companies are creaming it too. The cost of wind hasn't increased!

I was thinking the same earlier! It seems you just can’t win.

The price of dry kindling has increased as wood burners are being used instead of central heating. Sadly increase in demand brings higher prices.

[Posh]

People are confusing the Bank of England base rates with mortgage rates. There’s a big difference, especially when talking about the 1970s.

The reality is that house prices have far exceeded the growth in wages. Those buying now are as exposed as those with 10% mortgages back then. However, a doubling of interest rates from say 3% to 6% doubles payments and that won’t be sustainable for many. But 10% mortgages didn’t double over a short period to 20%.

D98BB2C2-4A3E-4E8E-B029-625889A94457.jpeg (103.17 KiB) Viewed 718 times

[dazza]

Also have to remember that the renewable energy companies are creaming it too. The cost of wind hasn't increased!

thats not necessarily correct.... if you listened to the owner of octopus last night
there is licensing fees they have to pay to use renewables ... also sun light is not chargeable
therefore solar and battery storage is the way forward ,,, dont try sell back to the grid totally pointless
however battery storage is the future

[Keith]

Also have to remember that the renewable energy companies are creaming it too. The cost of wind hasn't increased!

thats not necessarily correct.... if you listened to the owner of octopus last night
there is licensing fees they have to pay to use renewables ... also sun light is not chargeable
therefore solar and battery storage is the way forward ,,, dont try sell back to the grid totally pointless
however battery storage is the future

There may have been marginal increases, but minimum. Their profit margins are all massively increased.

Hopefully, by mid 2023, I'll be living in a property which is self-sufficient ('Passive House' standards, lots of solar). By early 2024 I'll be using an electric vehicle, that will be generally solar powered. In my current house, roughly this time last year, we bought two infrared radiators, one for the lounge and one for the bedroom. Both wifi enabled. We got in the habit of closing doors, so heat the lounge in the evening, then switch the bedroom heater on, about 45 minutes before going to bed. The central heating only goes on for about one hour per week. Our energy bills are lower now, than two years ago, when we would have the central heating coming on a few times each day.

[Sakhalin Shrimp]

Hopefully, by mid 2023, I'll be living in a property which is self-sufficient ('Passive House' standards, lots of solar)

TT fortnight housewarming then?

[Keith]

Hopefully, by mid 2023, I'll be living in a property which is self-sufficient ('Passive House' standards, lots of solar)

TT fortnight housewarming then?

Hope so, but we're being delayed & delayed Fingers crossed we'll be in for TT