Interest Rates

[Crazyface]

I know quite a few young couples who have recently bought themselves their first new home...ahhhhhh sweet. You'd think. But, OMG, they are new builds and they are three bedrooms !!!!! WOW. Just how cheap are the deals they are getting? I reckon that current interest rates will now rise too much for the next 10 years at least otherwise there will be a lot of houses become empty and another massive housing price crash.

 

[IanM]

Who knows.... all bets off on predicting stuff like this.... but,

- rates unlikely to rise much in next few years due to fears about growth and stability. (worldwide not just here)

- there is a housing shortage, that is keeping prices up. (supply and demand)

- The level of Mortgage approvals (by borrower not value ) have been pretty stable for the past 4 or 5 years.

- Lending criteria are miles tougher than prior to last "crash" in 1990s. In fact the loudest noises are from those being refused loans or struggling to save for a deposit.

Of course there are massive regional variations in affordability. The 3 bed you mention, might be a one bed flat in the south....

Overall, outlook is reasonable......with current levels of employment and inflation.....

 

[Canary_Yellow]

Looking at the rates that banks are giving at the moment on a 5 year fixed rate, there is no expectation of a rate hike in the foreseeable future.

 

[Deleted member 21784]

Looking at the rates that banks are giving at the moment on a 5 year fixed rate, there is no expectation of a rate hike in the foreseeable future.

Mines fixed for 10 years, so their defo planning for this long term 👌

 

[Lord Tyrion]

That fear has been there for a few years now. If rates do go up an awful lot of people will be stuffed. So far, no sign of a rise though.

 

[GreiginFife]

With the slow creep up to 95% LTV offers, albeit at punitive rate penalty, its becoming easier to buy despite approval criteria being 'tougher'. We are also seeing cycles of "better scoring" on credit checks due to a combination of better visibility and lower volume lending over the last 10 years.
In most cases the 2-3% interest variations are factored in to the lender's affordability checks with a 'stretch' rate being applied to any offered rate.
I would hazard that most declination of mortgage applications are a result of failing the stretch affordability rather than the 'standard' rate affordability.

So perhaps not as bleak as some think.