Re: House Price Protest: Aimed at the Chancellor, in Brighton, Sunday 13th May


"nospam@xxxxxxxxxxxxxx" <nospam@xxxxxxxxxxxxxx> wrote in message
news:FPidnQ6eL9sJE9zbnZ2dnUVZ8qKvnZ2d@xxxxxxxxx
The only difference is, that when you want to trade up, your shortfall
of a few percent is suddenly taking on mammoth proportions - £50k,
£100k - and you've guessed it - an even bigger, longer to pay off
mortgage. You haven't done OK for yourself, its delusion and a
grandiose one at that.

No its not. I know many people who bought a house 10 years ago, bought
another to let out and have sold the first and bought somewhere in
Spain and kept the second for an income.... most of them play golf all
day. They're not mega rich, they've just got a different lifestyle.

There you go - that's the difference right there. They bought ten years
ago!!!! What do you expect! Prices have roughly trebled or even
quadrupled in that time so a property costing £40k with a £35k mortgage
would have been paid off a long time ago if they've sold up since. So
you argument is utter, utter nonsense!

This thread as far as I can see is about where prices are now and where
they are going. There's absolutely no way that anyone buying now will
see their money quadruple over the next ten years (unless perhaps they
buy in London).

You have to consider your income, your house price, the historical price
and the predicted price. At present, if your income is less than £40k
and you're not on the property ladder, then you've got bugger all chance
of getting anywhere half-decent with a fair mortgage.

If you've got an income of £40k - on paper, you seem to be doing well,
but its not in step with the the housing market whatsoever.

£40k ten years ago would have got you pretty near a mortgage on a large
property really worth staying in. Now, it'd be a 3 bed semi in somewhere
alright, but nothing to write home about - if you're lucky. That's the
power of inflation.

People are seeing the figures but they aren't relating to reality
anymore and that's the con.

"My house is worth £300k". So bloody what? You earn £30k and the house
you want to buy is £380k - that's £80k difference - in the past that
£80k could have bought you 2 houses, maybe 3, but now, you think that's
alright because the house prices'll go up - coz they will won't they?
eh? fink abart it? Actually, no, no they won't, there will be a crash in
the future, probably just as you finish paying off your mortgage and
suddenly this palace you thought you lived in worth £450k is now worth
£150k and you've paid £600k for it. That's the con. But people just
can't see it and as I said - the banks will have made the most money on
it.

As you mentioned, people who in the last 10 years have done BTL are able
to make a profit - because the mortgages are tiny in comparison. Most
BTLers now aren't able to beat the profit margins offered by the
interest rate of a simple high street savings account on their money.
That's because the values of the properties they are buying just aren't
worth it. I predict as soon as the multi-BTLers can no longer afford to
get new mortgages on new properties (the same people who out-buy the
first time buyers), then there'll be a crash. Rents aren't going up in
step with housing inflation so it could happen fairly soon. In the
meantime, the banks extend the mortgage to income ratio to allow extra
borrowing and cash in.

Yes, its a free market, yes there are winners and yes there are losers.
But there'll be a lot, lot more losers in this one than there'll be
winners, believe me. So New Labour want you to think that you've done
well, the economy has done well because the housing market makes you
feel rich. When in fact, you probably aren't at all. There's a few more
zeros on your new "estate" but there's also possibly one more on your
debt slate.

Hence the continuation of the status quo - the rich get richer, the poor
get poorer.

Phew! a lot of words. Imho you are about 80% right, the problem is the
other 20% is more important.

First of all, anyone living in Kent living in a house that has quadrupled
in value in the last 10 years? Not me that's for sure, mine might have
almost doubled if I'm lucky.

Secondly, house prices are going up because more people want one than
there are houses available. When there are more houses than people who
want them, then prices will go down.

Thirdly, why are there more people wanting houses now than 10, 20 or 30
years ago? Because, according to some government statistics I saw the
other day, one quarter of the population is now living on its own, be it
because of divorce, bereavement, women preferring to remain single,
pensioners living longer, all sorts of new reasons that did not apply a
generation ago when the family was stronger.

Fourthly, you are right about an impending housing crash, it's already
happened in the States. But as long as more people want to buy houses than
there are houses available then any crash is likely to be short lived.
Mind you, I wouldn't count on it, friends of mine are betting on their
house going up in value for their pension. That's risky, for no matter
what the demand, the limitation will be wage inflation. If that
does not happen it will limit house price increases. As N of the T
posted, better put some of your money in gold. Long term, gold always
maintains some residual value.






.

Relevant Pages

  • Re: Libdems plan to surtax houses worth over £1 mn
    ... so what income do you need to get a £270k mortgage? ... Or getting an unsecured loan for the extra £20k. ... Good point - the costs will be a hell of a lot more if house prices had gone ...
    (uk.finance)
  • Is Now a Good Time to Buy a House?
    ... time to buy a house. ... Buying a house for quick profit ... rising house prices slows or evens off. ... $350,000 at 7 percent, your monthly mortgage payment would be $2,328. ...
    (uk.finance)
  • Re: Neo-Georgism--Replying to Chris Cook
    ... ever owning a property because prices have inflated ... One simple example: the thirty-year home mortgage, ... House Is Less of a Bite By DAVID LEONHARDT and MOTOKO ... payments, far more than they once did. ...
    (sci.econ)
  • Re: Is the government "dithering" deliberately over stamp duty?
    ... Well it's one way to address the issue of 'affordable housing', ... buy a house were now in a better position. ... to keep what these days is a relatively small mortgage going. ... the banks are in the business of risk management.... ...
    (uk.politics.misc)
  • Re: Refinery blockades from next Wednesday?
    ... >>> payment into a mortgage is better than a montly payment into ... >>> someone else's mortgage. ... > the house further for investments elsewhere. ... > I would regard my living house as a liability. ...
    (uk.rec.driving)