Cost of living crisis.

[DennisNedry]

Our 5 year fixed mortgage ends in November, current paying 1.99%, and are now looking at a rate nearing 6% when we renew. 

 

We already don't spend much as most of our income goes on the mortgage, bills and food. Needless to say, we are really, really going to struggle.

 

Why are we (young homeowners) being told to shoulder the financial pain so disproportionately?

 

I don't want to get into boomer bashing by any means but I can't help but feel the best off people in society are laughing right now. Generally those in their 50s-70s who own their homes outright, are drawing or will soon be drawing final salary pensions, with big cash reserves in the bank.

 

It stinks honestly. 

[Foxdiamond]

6 hours ago, leicsmac said:

And so we come back to the lack of affordable housing - both for rent and sale - in the right places, or any places at all.

 

Which is where government needs to step in.

The government needs the will to make changes. I'm no economic expert so probably see things in too simple terms. I do think that the country was much worse off after WW2 but there was a crying need to rebuild the country and provide decent homes for the population. There was a will to do it and it happened. 

[Sly]

1 hour ago, DennisNedry said:

Our 5 year fixed mortgage ends in November, current paying 1.99%, and are now looking at a rate nearing 6% when we renew. 

 

We already don't spend much as most of our income goes on the mortgage, bills and food. Needless to say, we are really, really going to struggle.

 

Why are we (young homeowners) being told to shoulder the financial pain so disproportionately?

 

I don't want to get into boomer bashing by any means but I can't help but feel the best off people in society are laughing right now. Generally those in their 50s-70s who own their homes outright, are drawing or will soon be drawing final salary pensions, with big cash reserves in the bank.

 

It stinks honestly. 

It’s all relative. 
 

I’d argue they lived through worse and came out the other end. 
 

Our generation has had better access to credit, potentially better cars, electronics, travel etc etc 

[Nalis]

1 hour ago, DennisNedry said:

Our 5 year fixed mortgage ends in November, current paying 1.99%, and are now looking at a rate nearing 6% when we renew. 

 

We already don't spend much as most of our income goes on the mortgage, bills and food. Needless to say, we are really, really going to struggle.

 

Why are we (young homeowners) being told to shoulder the financial pain so disproportionately?

 

I don't want to get into boomer bashing by any means but I can't help but feel the best off people in society are laughing right now. Generally those in their 50s-70s who own their homes outright, are drawing or will soon be drawing final salary pensions, with big cash reserves in the bank.

 

It stinks honestly. 

'6%??? Now there champ, back in our day we had 482% interest and didnt have those mobile phone things. Lets ignore houses costs far less against salaries though son.'

[ozleicester]

1 minute ago, Nalis said:

'6%??? Now there champ, back in our day we had 482% interest and didnt have those mobile phone things. Lets ignore houses costs far less against salaries though son.'

You were lucky! we were only allowed to buy a house if the king said it was ok, and even then it had to be on top of the cesspit...we werent allowed to cook inside and only had three tv channels

[Daggers]

2 minutes ago, ozleicester said:

You were lucky! we were only allowed to buy a house if the king said it was ok, and even then it had to be on top of the cesspit...we werent allowed to cook inside and only had three tv channels

Luxury.

 

We paid the King everything we could steal just to be allowed to live in a ditch near the moat. Which was the cesspit. And we had to cook our children - which the King ate.

[Sly]

14 minutes ago, Daggers said:

Luxury.

 

We paid the King everything we could steal just to be allowed to live in a ditch near the moat. Which was the cesspit. And we had to cook our children - which the King ate.

@foxking has a lot to answer for. Eating children! 

[Blue-fox]

2 hours ago, DennisNedry said:

Our 5 year fixed mortgage ends in November, current paying 1.99%, and are now looking at a rate nearing 6% when we renew. 

 

We already don't spend much as most of our income goes on the mortgage, bills and food. Needless to say, we are really, really going to struggle.

 

Why are we (young homeowners) being told to shoulder the financial pain so disproportionately?

 

I don't want to get into boomer bashing by any means but I can't help but feel the best off people in society are laughing right now. Generally those in their 50s-70s who own their homes outright, are drawing or will soon be drawing final salary pensions, with big cash reserves in the bank.

 

It stinks honestly. 

They had tough times, we will have tough times. Just like some people have better times now. It’s swings and roundabouts 

[Grebfromgrebland]

12 hours ago, Górnik Leicester said:

That's the hope, but given how some of the predictions of where the rates would peak have panned out so far I'm sceptical.

 

Without wanting to incorrectly signal myself as some kind of financial expert, I'm yet to be totally convinced that the BoE know whether their plan to reduce inflation is the right one. 

If it's to work rents would have to increase massively too and pensions reduce which probably won't happen. 

 

Pay would have to freeze too.

 

The best way to fix inflation would be for everyone to only buy what they need and nothing more.

 

At the minute no one wants to compromise on their lifestyle yet.

[dsr-burnley]

4 hours ago, DennisNedry said:

Our 5 year fixed mortgage ends in November, current paying 1.99%, and are now looking at a rate nearing 6% when we renew. 

 

We already don't spend much as most of our income goes on the mortgage, bills and food. Needless to say, we are really, really going to struggle.

 

Why are we (young homeowners) being told to shoulder the financial pain so disproportionately?

 

I don't want to get into boomer bashing by any means but I can't help but feel the best off people in society are laughing right now. Generally those in their 50s-70s who own their homes outright, are drawing or will soon be drawing final salary pensions, with big cash reserves in the bank.

 

It stinks honestly. 

The problem is that younger, less experienced people get paid less than older, more experienced people (as a rule).  And that younger people with children have higher expenses than older people without children.  They are both facts of life and can't be got round. 

[leicsmac]

1 hour ago, dsr-burnley said:

The problem is that younger, less experienced people get paid less than older, more experienced people (as a rule).  And that younger people with children have higher expenses than older people without children.  They are both facts of life and can't be got round. 

Just my take, but I wasn't aware the current economic system was in the textbook with gravity, evolution and thermodynamics as scientific fact.

 

Such things as economics are always mutable IMO.

[ozleicester]

5 hours ago, Grebfromgrebland said:

If it's to work rents would have to increase massively too and pensions reduce which probably won't happen. 

 

Pay would have to freeze too.

 

The best way to fix inflation would be for everyone to only buy what they need and nothing more.

 

At the minute no one wants to compromise on their lifestyle yet.

Step one is to limit profit grab, or heavily tax profits.

 

As it stands, increasing interest rates means profit to the banks/shareholders. 

 

Tax means profit to society 

[grth2004]

10 hours ago, Foxdiamond said:

The government needs the will to make changes. I'm no economic expert so probably see things in too simple terms. I do think that the country was much worse off after WW2 but there was a crying need to rebuild the country and provide decent homes for the population. There was a will to do it and it happened. 

Then Thatcher decided to sell all those homes off, one of the worst decisions in the modern era and the Tory’s have been doing it ever since. Right to Buy looks like a complete disaster now with no council homes and everyone renting off people trying to make money 💰 from rents. 

[leicsmac]

40 minutes ago, grth2004 said:

Then Thatcher decided to sell all those homes off, one of the worst decisions in the modern era and the Tory’s have been doing it ever since. Right to Buy looks like a complete disaster now with no council homes and everyone renting off people trying to make money 💰 from rents. 

And when it comes to matters essential to Maslows Hierarchy of Needs like housing (or food, for instance), laissez-faire has been shown to fail again and again throughout history. The only reason it persists is because it serves the already powerful.

[dsr-burnley]

7 hours ago, leicsmac said:

Just my take, but I wasn't aware the current economic system was in the textbook with gravity, evolution and thermodynamics as scientific fact.

 

Such things as economics are always mutable IMO.

OK, perhaps I should have said that in general, it is young people who have children and old people whose children have grown up and left, and in general people get paid less when they are young and progress to higher pay as they get older.  There are circumstances where people of retirement age have the care of tiny tots and where people start off highly paid and their pay drops as they get older, but it isn't the norm and I don't think it's likely to be.

[Foxdiamond]

3 hours ago, grth2004 said:

Then Thatcher decided to sell all those homes off, one of the worst decisions in the modern era and the Tory’s have been doing it ever since. Right to Buy looks like a complete disaster now with no council homes and everyone renting off people trying to make money 💰 from rents. 

100% this. A fundamental that has damaged the prospects of millions 

[leicsmac]

4 hours ago, dsr-burnley said:

OK, perhaps I should have said that in general, it is young people who have children and old people whose children have grown up and left, and in general people get paid less when they are young and progress to higher pay as they get older.  There are circumstances where people of retirement age have the care of tiny tots and where people start off highly paid and their pay drops as they get older, but it isn't the norm and I don't think it's likely to be.

Yeah, that's fair and I apologise somewhat for pulling you up on a distinction that appears to just be something pedantic, but I do think the distinction between such things is important because I also think the norms you mention here absolutely cannot hold with the way the world will change in short order and so those norms likewise changing will be not only be desirable, but essential.

[DennisNedry]

18 hours ago, dsr-burnley said:

The problem is that younger, less experienced people get paid less than older, more experienced people (as a rule).  And that younger people with children have higher expenses than older people without children.  They are both facts of life and can't be got round. 

Yeah that's true in the majority of cases.

 

But also kind of irrelevant to the point I was making. The point being why is policy on reducing inflation disproportionately clobbering certain people over others? 

 

I'll well aware all the Bank can really do is hike rates to hit borrowers but the government should be able to take alternative action that not only spreads the pain more fairly, but actually makes a much bigger impact on taking demand out of the economy and inflation. What those policies are exactly I'm not sure, but I feel there must be a more just way. 

[Izzy]

12 hours ago, leicsmac said:

And when it comes to matters essential to Maslows Hierarchy of Needs like housing (or food, for instance), laissez-faire has been shown to fail again and again throughout history. The only reason it persists is because it serves the already powerful.

Recently updated...

 

[dsr-burnley]

5 hours ago, DennisNedry said:

Yeah that's true in the majority of cases.

 

But also kind of irrelevant to the point I was making. The point being why is policy on reducing inflation disproportionately clobbering certain people over others? 

 

I'll well aware all the Bank can really do is hike rates to hit borrowers but the government should be able to take alternative action that not only spreads the pain more fairly, but actually makes a much bigger impact on taking demand out of the economy and inflation. What those policies are exactly I'm not sure, but I feel there must be a more just way. 

I think the progression goes:

 

1.  The government needs to borrow shedloads of money.

2.  If inflation is high, then Sterling bonds are losing value year on year.

3.  Therefore no-one will lend the government money unless they get a fair whack of interest.

4.  So interest rates on government bonds have to go up.

5.  Base rates follow government interest rates.

 

There may be an illusion or part-illusion that the Bank of England can set what rates it wants, but ultimately, interest rates have always approximately shadowed inflation, and I expect will continue to do so.  

[FoyleFox]

"Swap rates dropped by around 0.25% yesterday, sparking fresh hope that mortgage rates may be approaching their peak".

 

https://propertyindustryeye.com/glimmer-of-hope-for-borrowers-as-mortgage-rates-may-be-nearing-peak/

[Grebfromgrebland]

23 hours ago, Foxdiamond said:

100% this. A fundamental that has damaged the prospects of millions 

But at the same time made lots of working class Tories.

 

Which is weird.

[Foxdiamond]

Just now, Grebfromgrebland said:

But at the same time made lots of working class Tories.

 

Which is weird.

Yes. Turkeys voting for Christmas 

[Lako42]

2 hours ago, Foxdiamond said:

Yes. Turkeys voting for Christmas 

Dullards being dullards

[UniFox21]

Imagine my shock