Labour could deliver fixed rate mortgages for the life of a loan

Labour could demand that every mortgage provider in the UK should have a fixed rate mortgage for the rest of a loan’s life available to borrowers so that never again should people be caught out on the whim of the Bank of England. It would cost Labour nothing but it would give certainty to millions of people’s lives.
#uk #labourparty #mortgage #housing #loan #interestrates
ABOUT RICHARD MURPHY
Richard Murphy is Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
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[@charliemoore2551]

It would be more sensible if the government gave mortgages themselves. Economies of scale would make it much cheaper. The current system is just a licence for top-heavy bureaucracies to print their own money.

[@WarrenPeaceOG]

I agree. In addition to major public investment in high quality, mixed housing/council housing

[@megannehover4013]

We bought a house in France with a 17 year fixed rate mortgage, plus the option to readjust for inflation every year if we wanted to. So we did that - adjusted and rounded up every year (+10€ or so a month) and knocked 2 years off the repayments.

[@adenwellsmith6908]

Ah yes, floating rate mortgage + interest rate swap = fixed rate mortgage Labour proposes that the man or woman buying a house has to start buying options and other derivatives.

[@RobinHarris-nf4yv]

Labour have been talking about govt mortgage guarantees as the big problem is getting on the housing ladder in the first place It’s awful that monthly rent costs are often higher than mortgage repayment costs

[@BillDavies-ej6ye]

Well, I suppose the owner has to also pay mortgage repayments, plus the cost of maintenance on the house, without considering the house as an asset from which a profit must be taken.

[@RobinHarris-nf4yv]

@@BillDavies-ej6ye at the end of 25 years a landlord owns an asset worth say £400k The next 25 years is rent in and no mortgage payments out The renter has an asset worth £0.00 The next 25 years for the renter is rent going up

[@BillDavies-ej6ye]

@@RobinHarris-nf4yv I understand that, and I agree that things must change. My comment was regarding your second paragraph, which is why rents are higher, at least initially.

[@elliottculley3033]

Already available

[@joegibbs448]

I could`nt get one in 2001.The mortgage broker at the time said they wern`t available.

[@elliottculley3033]

@@joegibbs448 well that was 23 years ago. New lenders have entered the market since then and are now available albeit more expensive than the high street lenders.

[@Vroomfondle1066]

Available to everybody with a mortgage no matter the circumstances?

[@richardwatkins6725]

You’re so right a simple £1 license gives you the right to be in the market. The only way we are going to get fair services and ensure government defines fair markets. They killed the Building Societies and Banking is now terrible, no interest on money, limited services and high rates. The same is coming to food shops where you have to give all your data to get lower prices…

[@witlesswonderthe2nd883]

This is for when blockchain comes into full force and everyone information is floated to make a profit from.

[@adenwellsmith6908]

And the NHS. You have to give your details to even get treated. Guys and St Thomas's operate that system. The terms and conditions for example of Swiftqueue are quite clear. We can [and will] change our terms and conditions and we don't have to tell you. In other words we intend selling your data. Then there is Synnovis. They lost all the medical records and they are now on the web. Again Guys. The PHSO [ombudsman] doesn't give a toss. What's even more alarming, is that I SAR for my records from them. They sent a link, where to get your data they expect you to sign up to a service to get it. The terms and conditions, we can change the T&C's we don't have to tell you, and we can then sell your data. Do you spot the theme?

[@adenwellsmith6908]

@@witlesswonderthe2nd883 Sweden has had a massive increase in fraud, caused by the move to cashless.

[@witlesswonderthe2nd883]

@adenwellsmith6908 it’s one of the reasons my face to face transactions are 99% done in cash. Small businesses have been bullied into offering card payments and it costs them a small fortune in fees on top of charges to access cash, it’s a double whammy for them and big profits for banks. If I have to purchase something online because it’s unavailable near me I of course leave a paper trail for them to log and monitor. I know during the coof debacle I refused to participate in the shopping hysteria where we had just one of the local evri delivery guys posting his daily route saying people were keeping him busy with between 2-300 parcels a day. When I do have to use my card I use my pin and never contactless like so many who don’t even check the amount they’re tapping for so have no idea if fraud is being committed until it’s gone.

[@garyb455]

This is a great idea, the downside is it will massively increase the monthly costs

[@zebop917]

How would you avoid the situation where someone could fix their mortgage and then rates drop for the next 25 years?

[@melch4040]

The BOE is a one club golfer.

[@jankoszuta9835]

Great idea!

[@timbrown1897]

start with the money borrowed by the government make it say 00.1 % wait it can't be done so why do you think that the tax payer is going to buy it

[@dcphillips1991]

Is it a legislative difference between the UK and US that is the reason for us not having longer term lending, or just a choice of the banks?

[@roski316]

May be worth a chat with a good mortgage broker as there are already lenders that offer fixed rates to 40 years in the UK

[@Moysie01]

Long term mortgage rates already exist - engage with industry experts (mortgage brokers) who could wrap this up in about 10 minutes for you :)

[@metallitech]

It would be fixed, but it would be high.

[@thpark8189]

Already available. They cost about an extra 1 - 1.5%, as a result of the extra risk to the lender.

[@kevinsyd2012]

Yes, indeed. Plus a £1,500 - £2,000 set-up fee

[@Vroomfondle1066]

Extra risk? After the one way bet of the GFC? Moral Hazard much? Don't make me laugh...

[@akastewart]

But isn't the problem with a fixed rate for the lifetime of the mortgage that it would necessarily need to offer a true ROI for lenders while accounting for inevitable monetary debasement over such an extended time period. (With MMT on the rise, debasement in real terms - as opposed to fudged government numbers - is likely to stay high for the foreseeable future.) Also, I'd reject the notion that those 'caught out' by variable rate mortgages are blameless. Fixed rates are typically higher than variable rates, Those opting for variable rates are knowingly sacrificing longer-term stability and increasing their risk of unmanageable rate increases for the sake of minimising monthly costs today. They placed their bets. They lost. And, please, let's not talk about the US as though it has all the answers. If uptake of lifetime, fixed-rate mortgages was as high as you seem to think, the US wouldn't have been ground zero for the 2008 housing market crash that disrupted the entire global economy.

[@MAGAr-b1z]

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[@PoshanMind]

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[@MAGAr-b1z]

​@@PoshanMind Well her name is 'ABBY JOSEPH COHEN SERVICES'. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.

[@EalDieguez]

I went from no money to lnvest with to busting my A** off on Uber eats for four months to raise about $20k to start trading with Abby Joseph Cohen. I am at $128k right now and LOVING that you have to bring this up here

[@PoshanMind]

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[@Merissabade]

Abby Joseph Cohen Services has really set the standard for others to follow, we love her here in Canada 🇨🇦 as she has been really helpful and changed lots of life's

[@roberthuntley1090]

If enough people moved to this sort of mortgage, the downside is that the Bank Of England would lose the ability to influence spending in this sector of the market, probably meaning that they would need to raise interest rates earlier and harder on other sectors to have the same overall effect on the economy when they needed to reduce inflation. Also, it could make people 'prisoners' in their own homes, unwilling to move because their current interest rate was well below the true (market) rate. Back in the 80s when I moved to Bath, I was paying (from memory) over 13% while some of my colleagues had a locked in rate of a third of that (local council loan taken out years earlier).

[@stephfoxwell4620]

These already exist but are quite expensive. Are you suggesting Government subsidies?

[@bakakafka4428]

I think he's suggesting forcing banks to not ask more for fixed interests, i.e. force fixed interests for all mortgages for private people. The banks have been saved by the people's money, and looking at their exorbitant profits, they can afford it. The cost would be in less payout for the super wealthy bank stock owners. Therefor, Labour will never do this. Those are their sponsors.

[@jankoszuta9835]

You don't have to subsidise, if the lenders all have to do it then competition will force the price down

[@Vroomfondle1066]

Heaven forbid the government subsidise the people instead of big business...

[@michaelmayo3127]

Stramer Labour!! deliver something that would be advantageous to the public and take the uncertainty out of home buying? Get a grip og yourself man!!

[@michaelmayo3127]

You don't have to go to the USA for a fix interester rate mortgage loan. Fixed rate house loans are also available in te EU. Min is a 30 year loan at 4% paid quarterly.

[@garybush6666]

You talking like this isn't already available - but it is?! Isn't this someone again NOT a practicing qualified financial adviser talking about something they have no idea of? Situation is the general public despite being offered them they don't buy them - are you saying they should be forced! This video is too close to people having been on rates of 1 to 2% a year to try and fix them into a high 4% rate for life 🤪

[@smck001]

Labour are going to deliver nothing.