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UK mortgage rates spike to highest level since Truss tax plan spooked markets

9 Comments
By PAN PYLAS

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9 Comments
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Can't have cake and eat it.

3 ( +3 / -0 )

Click bait headline. The interest rate has slowly risen over a period of time to reach what has historically been the average interest rate, the median. If people have taken out massive mortgages that they can only afford at interest rates lower than ever seen in recorded history and didn’t allow for the inevitable reversion to the mean then they have no one to blame but them selves. Having experienced 16% interest rates on my mortgage in the past this doesn’t seem a “spiked.

6 ( +6 / -0 )

The media is so owned - “unfunded tax cuts”?

First, the glaring problem with the Truss budget was the high spending. Unfunded spending. The secondary problem was the media is owned.

The UK has high inflation - too much money chasing too few goods. Hiking interest rates doesn’t produce more goods. But lower tax rates can incentivize more production, because the after-tax return on productive activity is improved. More production under lower tax rates could lead to higher tax revenues, not less.

That the media spouts this “unfunded tax cut” nonsense is if it were factis a disservice to a public that suffers under high inflation.

Finally, one wonders why British mortgage market doesn’t offer long term fixed mortgages. Seems like there is room in that market for more competition.

4 ( +4 / -0 )

Truss,that lady from tank?

No money for rent or mortgages?World is big move to...Rwanda for example...?

-2 ( +0 / -2 )

UK interest rates peaked at 17% in 1979 and nearly 15% in 1989. The ride is just beginning. Everyone enjoying that utopian Brexit buzz yet?

Way too many Britons mortgaged themselves to the hilt when rates were low, not expecting governments to unpick globalisation and trash the global economy. Rising inflation hammers only the poor. Increasing interest rates won't affect it, but will hammer the middle classes. That leaves the richest 3% to vote Tory. 3% seems a bit low to win an election. They might want to check that.

-1 ( +2 / -3 )

Way too many Britons mortgaged themselves to the hilt

That's very easy to do when houses cost 11x average earnings.

Most comparisons with the 1970s miss the point. Houses back then were cheap and folks paid bigger interest but on much smaller loans. Now folks have to take out big loans off two salaries just to buy a very ordinary house. If you mess up, you're back with parents or homeless. You can't just go in a council house because they were all sold off. You probably can't rent either because rent will be higher than your pre-increase mortgage payment.

The solution is build more houses and charge bigger capital gains tax when folks, esp. speculators not living in them, flip houses. To build more houses, introduce land value tax which will punish people banking land, as many developers do. There is land out there with planning permission but not being built on because someone is waiting to maximize their profit.

2 ( +3 / -1 )

The answer is simple. Build more affordable housing. Ban foreigners from owning hundreds of homes they rarely live in. Tax those to the hilt.

3 ( +5 / -2 )

House prices will solve them selves and would have already if successive governments of all political persuasions hadn’t interfered with the market in a cynical vote buying exercise keeping house prices unnaturally high.

1 ( +1 / -0 )

Wallace.....

The answer is simple. Ban foreigners.

A total ban could be a bit overzealous but a net influx of 400,000 last year is not going to ease the housing problem.

0 ( +1 / -1 )

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