Trying to buy a house in this area is near impossible

[lane lover]

You say that, but smart buyers would have likley fixed rates for 5 years. The fixed rates at the moment are very attractive.

It will take a while for rates to rise 2%, so I expect the impact to be limited on house prices.

[Otta]

On the mortgage we are taking out (not the best deal, but all we could get with "help to buy", the paper work says that payments will rise by something like ?136 for every 1% interest rates rise (after the fix term). It's scary.

[????]

I am unconvinced rates will go up dramatically for a long time - we live in change times macroeconomically/politically

Significant interest rates rises will also potentially

a) lead to serious social/political 'problems', the banks may have got away with 'it' in 2008 but the mass repossessions associated with big hikes (or proably just a couple of percentage points) would have some serious, serious issues politically...... and potentially for capitalism.

b)ultimately it will bust many banks again if a housing bust resulted from the above

Inflation will be allowed to get higher rtaher than any significant hike in interest rates IMO

Western Economies are still in intensive care.......(and worryingly there's some suggestions that the BRIC/MINTS are going that way too)

[Jeremy]

I would imagine rates are going to creep up slowly, specifically because of the number of recent buyers. You have to reckon that the BOE are better economists that the EDF and will try to avoid causing widespread defaults.

[????]

...I am not sure if they are.......

[KidKruger]

the banks will still be there still making their money, there's been no real incentive for them to change their approach. the banks got away with it and will do so again. and why, given they don't actually suffer, wouldn't they.

even RBS, owned by the government, is taking the piss, as ever. 2 years ago they were ordered to offload a huge proportion of their retail / Corporate customer base - but it never happened (and there was a determination within RBS that it would NOT happen). banks rule OK, regardless of the 'politics' - until a Govt grows a spine why should this not continue ? the banks have nothing to be scared of !

[????]

...but they will try and avoid causing widespread defaults, a lragely political decision

[????]

We have free banking, no-one switches and the internet is the way forward. Many of them would be delighted to offload a bunch of retail as it's expensive to run and outdated.

Metro - they've done well

Tesco bank forging ahead

Vigin - in the top 5 in a matter of time

NOT

We get exactly what we deserve......

[Otta]

???? Wrote:

-------------------------------------------------------

> We have free banking, no-one switches and the

> internet is the way forward. Many of them would be

> delighted to offload a bunch of retail as it's

> expensive to run and outdated.

>

> Metro - they've done well

> Tesco bank forging ahead

> Vigin - in the top 5 in a matter of time

>

> NOT

>

> We get exactly what we deserve......

I agree to an extent, but every bank takes the piss, just to a different extent.

Can someone (Quids) explain to me (because I genuinely don't know) how the banks justify charging 4 - 5% on mortgages when the interest rate has been rock bottom for years? I get that they need to turn a profit, but I just don't know how they justify these figures. surely 2 - 2.5% would make them a profit without blatantly robbing everyone just because they can.

[KidKruger]

the banks have to justify ANYTHING ????

[Jeremy]

Actually 2% is about average at the moment. Higher rates are sometimes applied in supposedly higher risk situations. Over 4% sounds absurd.

[*Bob*]

The usual rule applies:

The less you have, the more the things you need will cost you. Loans, mortgages, electricity, gas..

[Otta]

That's what we'll be paying. For two years...

Funny how the people that are "high risk" are the ones they make life most difficult for. And surely the whole point of the government guaranteeing 15% is we default is to take the risk away from the banks, so we should be treated like everyone else, but instead we just have to bend over and let them roger us, because they can, and we don't have any other option other than to keep paying low rent for a dump or stupid rent for somewhere half decent.

I know it's cheap and simplistic and left wing to have a go at the banks, but they are a bunch of theiving cunts!

[Otta]

Or just "what *bob* said".

[Cyclemonkey]

Yeh if you are being quoted much more than 2 - 4% at the moment then you must be viewed as a risk or have a very low deposit. What are the typical rates being offered to Help to Buy customers at the moment?

We don't talk about it much here but there are sub prime lenders in the UK too, many of whom deal with people with bad credit or on low incomes - in my line of work we see a lot of people who brought under Right to Buy with those types of lenders and they really struggle if rates go up as they are already paying fairly high rates.

[Earl Aelfheah]

The banks are perfectly happy to lend to individuals that can't afford it, because should they default the banks still get their money back, with interest. With a deposit put down, prices rising and a taxpayer guarantee to boot, they can't lose. If they can squeeze a good rate of interest up to the point that the inevitable does happen then all the better (from their point of view). The banks and the government are complicit in this crazy 'help to buy' scheme because it's a vote winner with those already on the ladder (who tend to be the demographic most likely to go to vote), who like seeing the price of their house going up on paper. It's completely cynical IMO.

Otta Wrote:

-------------------------------------------------------

> That's what we'll be paying. For two years...

>

> Funny how the people that are "high risk" are the

> ones they make life most difficult for. And surely

> the whole point of the government guaranteeing 15%

> is we default is to take the risk away from the

> banks, so we should be treated like everyone else,

> but instead we just have to bend over and let them

> roger us, because they can, and we don't have any

> other option other than to keep paying low rent

> for a dump or stupid rent for somewhere half

> decent.

>

>

>

> I know it's cheap and simplistic and left wing to

> have a go at the banks, but they are a bunch of

> theiving @#$%&!

[Jeremy]

Best put on your tin foil hat next time you have to visit your branch.

[Otta]

rahrahrah Wrote:

-------------------------------------------------------

> It's completely cynical IMO.

Tend to agree. I certainly am under no illusion that the gov are doing this to help the likes of me. But it's the only option open to us so we just have to go for it and hope that we get a better deal (or at least not a worse deal) next time.

[Earl Aelfheah]

I actually don't think you can blame the banks really. I mean, lending to people who you know are likely to default is not the most ethical thing and is (as I said) pretty cynical, but them their duty is primarily to their shareholders. It's not *entirely* the fault of government either, as they know that even if it would be in the general long term good to put measures in place to bring house prices down, it would be political suicide. Fundamentally, it's the fault of the many home owners who get excited about the ever increasing list value of their home, base their feelings of security and well being on it and use it to judge the success of government.

[Earl Aelfheah]

I didn't mean to criticise anyone taking up these schemes - it makes sense from an individual's point of view to do what they can to get on the ladder.

I just despair at the whole narrative around house prices. The fact that papers report increasing prices as 'good news'.

Otta Wrote:

-------------------------------------------------------

> rahrahrah Wrote:

> --------------------------------------------------

> -----

> > It's completely cynical IMO.

>

>

>

> Tend to agree. I certainly am under no illusion

> that the gov are doing this to help the likes of

> me. But it's the only option open to us so we just

> have to go for it and hope that we get a better

> deal (or at least not a worse deal) next time.

[MrBen]

Banks are like policemen. Never around when you need them / always there when you don't.

[Blackcurrant]

rahrahrah Wrote:

-------------------------------------------------------

> The banks are perfectly happy to lend to

> individuals that can't afford it, because should

> they default the banks still get their money back,

> with interest. With a deposit put down, prices

> rising and a taxpayer guarantee to boot, they

> can't lose. If they can squeeze a good rate of

> interest up to the point that the inevitable does

> happen then all the better (from their point of

> view). The banks and the government are complicit

> in this crazy 'help to buy' scheme because it's a

> vote winner with those already on the ladder (who

> tend to be the demographic most likely to go to

> vote), who like seeing the price of their house

> going up on paper. It's completely cynical IMO.

Yes "help to buy" is really about recapitalising the banks that have dodgy balance sheets rather than helping first-time buyers get "on the ladder". If it happens to bolster the apparent recovery and win votes, so much the better. The one thing it isn't doing is helping people who aren't already on the property ladder.

[emilou]

Prices are crazy at the moment. A house we tried to buy in the summer and eventually gave up hope of the sale going through in October has just come back on the market this week a full ?150k more than it was on for in the summer! That's crazy. We've shipped out to nunhead in the end which seems much more affordable and still a lovely feel, lovely shops and only mile or so from east dulwich. Surely this kind of crazy growth isn't sustainable?!

[MissKing]

I think certain estate agents are a pushing the prices up... Ahem foxtons... There is a two bed terrace house on cornflower terrace with them at the moment.... ?700k!! I reckon easily ?100k over priced.

[binary_star]

If buying a house in this area was near impossible then they wouldn't be selling. But they are.

What you mean is it's near impossible for you. And as it happens, for me.

It's sh*t isn't it but then no-one *has* to live in ED after all.