It's getting pretty scary over here in the UK. The government's strategy seems like it's in a doom loop. We have inflation so the BoE is going to hike rates and cause a recession to tackle inflation. But the government have announced a bunch of measures to boost growth (whilst blowing up the deficit). So which is it, will BoE win and cause a recession to tackle inflation (thus causing a debt crisis with massive debt we can't afford to pay?), or will the government win and boost growth (presumably causing spiraling inflation?). Meanwhile, the level of uncertainty caused by this simply must be putting off investors?
UK banks and lenders suspend offering new mortgages amid market turmoil
31–40 of 54 posts
Re: UK banks and lenders suspend offering new mortgages amid market turmoil
#32I imagine it’ll nix all fixed rates for a good lot of years. There’s a lot of people that are going to be really hurt in the UK this winter. Many will lose their homes, even those that are renting (who probably won’t see it coming). It’s all well and good to smugly say “you should have understood what you were signing up for” but that doesn’t help people in this situation or their families. It was already becoming im…
I’m sorry but I just don’t see how “many will lose their homes”. Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments. Evicting people is risky long winded and generally speaking their last option. Unless you've got some data to back up what you are saying in which case I’ll shut up. Edit: Lots of replies saying "but they're not charities etc…
> Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments.
Isn't that exactly the business they are in? In any country.
I mean that's sort of what a mortgage is. If you legitimately cannot ever afford to repay it, well... you will lose the house. That's sort of what the deal is, right?
Re: UK banks and lenders suspend offering new mortgages amid market turmoil
#33I imagine it’ll nix all fixed rates for a good lot of years. There’s a lot of people that are going to be really hurt in the UK this winter. Many will lose their homes, even those that are renting (who probably won’t see it coming). It’s all well and good to smugly say “you should have understood what you were signing up for” but that doesn’t help people in this situation or their families. It was already becoming im…
Interest rates have been considerably higher in the past though. What is different now is that people have gotten used to an endless supply of cheap credit and thinking they are well off so long as the monthly payments can be maintained. Also, the social media pressure to have the apperance of a perfect life doesn't help.
Yes, but those interest rates have been affordable. That context of affordability matters. The UK is also basically organised around the profitability of private home ownership. Its the fundamental basis of the current ruling party's support. Anything that threatens property value and rent yield is catastrophic for the economy (as currently organised) and the current government
Re: UK banks and lenders suspend offering new mortgages amid market turmoil
#34I imagine it’ll nix all fixed rates for a good lot of years. There’s a lot of people that are going to be really hurt in the UK this winter. Many will lose their homes, even those that are renting (who probably won’t see it coming). It’s all well and good to smugly say “you should have understood what you were signing up for” but that doesn’t help people in this situation or their families. It was already becoming im…
Interest rates have been considerably higher in the past though. What is different now is that people have gotten used to an endless supply of cheap credit and thinking they are well off so long as the monthly payments can be maintained. Also, the social media pressure to have the apperance of a perfect life doesn't help.
You're missing a major aspect of the difference now, when compared to the 80's and before, which is house affordability.
Even at peak in the 1980's you were looking at house prices being 5x income at most. (https://www.economicshelp.org/blog/5568/housing/uk-house-pri...)
Now at the UK level you're looking at 7x and in London 11x. That means that increases in interest rates have a far higher impact on affordability.
Re: UK banks and lenders suspend offering new mortgages amid market turmoil
#35Earlier quoted context omitted.
I’m sorry but I just don’t see how “many will lose their homes”. Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments. Evicting people is risky long winded and generally speaking their last option. Unless you've got some data to back up what you are saying in which case I’ll shut up. Edit: Lots of replies saying "but they're not charities etc…
> Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments. Isn't that exactly the business they are in? In any country. I mean that's sort of what a mortgage is. If you legitimately cannot ever afford to repay it, well... you will lose the house. That's sort of what the deal is, right?
Eventually, sure. I can’t speak to the UK, but in New York a foreclosure takes at least 8-15 months. You must first fall significantly behind on your payments, then a 90 day intent to foreclose notice, and then the actual foreclosure process. Maybe things are significantly faster in the UK? Seems unlikely that the UK government would allow mass evictions over this coming winter.
Re: UK banks and lenders suspend offering new mortgages amid market turmoil
#36Earlier quoted context omitted.
When I lived in the UK my experience was that not only me, but a lot of folks in my age range back then ("young professional") moved all the time. The tenant protections were pretty appalling, particularly if you rented from a private landlord. It does not seem very unlikely that people will lose their homes and have to move.
UK tenant protections are not the greatest, but I wouldn't call them 'appalling'. However, this is talking about people who own their home but have a mortgage.
Well I let other people judge how they are. However to this point:
> However, this is talking about people who own their home but have a mortgage.
Well a friend of mine got kicked out of his house as a renter because his landlord declared bankruptcy. And apparently that person owned 6 other properties and he was not the only one who lost their place of living.
Re: UK banks and lenders suspend offering new mortgages amid market turmoil
#37I imagine it’ll nix all fixed rates for a good lot of years. There’s a lot of people that are going to be really hurt in the UK this winter. Many will lose their homes, even those that are renting (who probably won’t see it coming). It’s all well and good to smugly say “you should have understood what you were signing up for” but that doesn’t help people in this situation or their families. It was already becoming im…
But I don't want to help those people or their families. They wouldn't want to help me either and frankly they need that ex-imperial superiority beaten out of them at this point.
Re: UK banks and lenders suspend offering new mortgages amid market turmoil
#38Earlier quoted context omitted.
UK tenant protections are not the greatest, but I wouldn't call them 'appalling'. However, this is talking about people who own their home but have a mortgage.
Well I let other people judge how they are. However to this point: > However, this is talking about people who own their home but have a mortgage. Well a friend of mine got kicked out of his house as a renter because his landlord declared bankruptcy. And apparently that person owned 6 other properties and he was not the only one who lost their place of living.
Yeah you are right, I didn't think about that.
Re: UK banks and lenders suspend offering new mortgages amid market turmoil
#39Title reads like all banks have ceased trading mortgages, which is ludicrous. here's a BBC article with a more reasonable title: https://www.bbc.co.uk/news/business-63041679
A more reasonable title but also no mention of the fact that currencies elswhere are also under pressure.
> no mention of the fact that currencies elswhere are also under pressure
Apparently other currencies under pressure is a sign of
https://www.express.co.uk/news/world/1653931/eu-news-euro-cu...
Last month, the Euro fell to parity against the US dollar last month for the first time in more than 20 years. It has bounced back to €1.03 but is still massively short of the €1.18 hit nearly a year ago.
Eric Noirez, a prominent EU critic and member of the Generation Frexit campaign in France, told Express.co.uk: "The Euro is a system that has reached the end of its tether.
Their policy has consisted of massive monetary creation, and this in a totally unreasonable way ... it will lead to eurozone collapse ... The recession is obvious ... the biggest financial crisis in its history ... An absolute madness!
But when the UK currency is selling off ... https://www.express.co.uk/news/politics/1674629/Liz-Truss-cr...
Presumably all those woke traitor hedge fund managers are to blame.
'They don't believe in Britain!' Tory chairman says tax cut critics are like Remainers New Conservative chairman Jake Berry has given his first interview since being appointed 20 days ago with a broadside at the people who "don't believe in Britain".
Re: UK banks and lenders suspend offering new mortgages amid market turmoil
#40Earlier quoted context omitted.
> Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments. German mega-landlord corporation Vonovia announced just a few days ago that they will evict everyone too far behind on payments for heating [1], in order to pacify investors. Never trust rabid capitalism to keep the people in mind. For the beancounters, all that matters is the current st…
> too far behind That could mean anything.
The details are in the article. Basically, the legal framework allows eviction initiation if people are behind in either rent or heating costs ("Nebenkosten") for over two months worth of rent.
Unfortunately, given the exploding heating costs, for some cases you can rack up two worths month of staying behind in rent in just one month of heating costs - and unlike with COVID, rent protection legislation hasn't kept up in speed with exploding costs.