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I never understand this. Young people can be better off...if they are willing to get loans at exorbitant interest rates? Isn't that even more difficult for the average person? I imagine it's much more common today for someone to be paying an affordable mortgage on an overpriced house than an overpriced mortgage on a decently priced house.
Zebra-
I never understand this. Young people can be better off...if they are willing to get loans at exorbitant interest rates? Isn't that even more difficult for the average person?
If wages are going to remain mostly static, on a long enough timeline nobody can buy a property regardless of the interest cost of the loan.
House prices dropping 25% benefits everyone medium to long term, and 6%+ interest rates won't last forever (I hope).
Howard
House prices will fall 25pc if interest rates keep surging, a leading think tank has warned, after higher borrowing costs triggered the biggest drop in wealth since the war.
The Resolution Foundation said rising interest rates had already wiped £2.1trn off British household wealth in the past year alone.
However, the think tank said that young adults could emerge better off as property will be more affordable and their pension savings will go further.
The report warns that Britain’s “unprecedented” wealth boom of the past 40 years is nearing an end, as higher interest rates trigger a surge in mortgage costs, falling house prices and a sell-off in government and corporate bonds. It also notes that Britain saw total household wealth rise from around 300pc of national income in the 1980s, to 840pc – or £17.5trn – by 2021.
It comes as data from Rightmove today reveals that asking prices in the South East dropped £5,000 in a month to an average of £490,386. Across the nation, asking prices fell by more than £900 on the month to an average of £371,907.