Strolls, you seem to think that people borrow against their properties, ie remortgage their properties, in order to spend the dosh on their lifestyles. Have you got any figures for this? In my personal experience people get mortgages in order to buy their home over a very long period of time, and paying their mortgage takes a sizeable chunk of their income. When they have paid it off, or it becomes proportionately smaller over the years, their disposable income goes up. They get other loans to pay for things like cars. Oldsters can of course do equity release on their house, but that is in effect selling it and then leasing it back until death, and not getting any of the benefit of rising prices, or have anything to leave to family (whatever your or my view on inheritance might be). More supply and lower prices is bad for those who own their property outright (about 20% of all households, with 35% being rented and the rest mortgaged) who actually want to sell their property instead of just living in it. But it’s really terrible for those who have taken on big mortgages in order to get on the ladder or move up it and who would find themselves in negative equity. The property market in this country is nuts, and has been for a very long time.
its not just a uk issue average house price is 15 times the average wage Average Salary in New Zealand (2024) NZ$61,828 per year NZ$1,189 per week The average house price in New Zealand is $930,495 as at Feb 2024. Over the last 12 months this has decreased by 1.31%.
There are 8.5m Residential Mortgages in the UK and 26.5m dwellings. That means only 33% of those are mortgaged with 66% mortgage free (or bought by ltd companies presumably). I disagree negative equity is bad, it is only bad if a household loses their income and are forced to sell otherwise all else all being equal, they should be able to sustain their ingoing/outgoings (barring some unforeseen massive outgoing). In terms of house prices fluctuating, once you are on the ladder, it's all relative anyway in terms of upsizing/downsizing. Where lower prices helps is for people getting their foot onto the ladder who cannot. Higher and rising prices are just an incentive for people to invest and hoard houses imo.
Yeah, I was thinking more of people being more inclined to take out unsecured loans or spend on credit cards if they have equity in their property. I imagine lenders would use this as one of the criteria for deciding credit worthiness for unsecured loans, too. These numbers seem incredible to me.... ACCORDING TO THE OFFICE FOR BUDGET RESPONSIBILITY’S NOVEMBER 2023 FORECAST, HOUSEHOLD DEBT OF ALL TYPES IS FORECAST TO RISE FROM £2,259 BILLION IN 2023 TO £2,429 BILLION IN 2025. Statistics Archive - The Money Charity It's just nuts and, I said before, built on sand.
Yeah, I get the thinking. Sadly I suspect that many are also borrowing to pay for basics, given the continuing existence of pay day lenders, and the rise in interest rates can account for some of the rise in overall debt. Though the old git in me seems to remember paying much higher interest rates than we’ve had over the last couple of years on mortgages and for a few house moves in the 90s made nothing or close to nothing on the value of the property. Plus we were sold crap endowment mortgages and so forth.
As I said, it's just a coincidence they've expulsed 3 candidates in the last 24h for being loopy racist ****ers.
