Denial to Acceptance on MSE

carolt

trulysaintly wrote: »

Well if those are your concerns, you are not alone. That doesn't however give you the right to conclude that property prices will continue to fall - it's all hearsay at the moment.

What you are getting hot under the collar about are 'life choices' - it's your choice if you buy a property, your choice to work if you have that option, your choice if you choose to move home.

However, if this is to be a 'home for the future' and you are not planning to move again for, say three years, what issue would you then have if values dropped by 10% anyway in the next 12 months if you're not looking to move?

Negative Equity is only a REAL issue for you if you want to move - if you are planning on staying put for a decent length of time, this market is going to recover and what's the problem.

Expecting the market to drop 30-40% just because it suits you doesn't make it realistic.

Lenders will not go back to a model of 3x income for mortgages because wages haven't kept up with house price inflation - that is why they brought in Affordability Calculations instead, to allow them to offer mortgages that were affordable, with evidence shown.

Don't have a go at me just because my opinion is different - I have dealt with mortgages and the housing market day in, day out for the last 13 years so I happen to think that I can give my views from an informed viewpoint - many journos are lazy and look for soundbites that suit - bad news sells papers after all.

Sorry, if you have been a mortgage advisor for the last 13 years, you have never seen the market in freefall as it is now. If you said you remembered the last downturn and could back up your argument that things are different this time, then I'd take your views more seriously. As it is, because prices have always risen since you started working, you fall into the trap of imagining that that's how it will always be. Your professional experience has been gained during extremely atypical times.

I'm happy to take my financial advice from Mervyn King, say, who says exactly that, and that the last few years were an aberration not to be repeated.

I also fail to see how your argument suggests that buying now rather than when prices have fallen makes no difference to FTB's, as in your example, if I can save 10% of the purchase price plus associated interest costs over 25 years, that is a lot of money. It may seem insignificant to you, but speaking as the one who'd be putting my cash on the table, it is not to me.

Obviously, you'd like to persuade FTB's that it doesn't matter when they buy, so you can sell more mortgages now. That doesn't make it true.

carolt

trulysaintly wrote: »

Stop for a moment and consider what I have said previously.

There are two types of Buy to Let Investor.

Hobby and Professional.

Hobby's are the ones with larger mortgages on these properties, probably coming now to the end of two year deals when their interest rates are increasing, on average by 1%.

The Hobby B2L individual, as they did it because their best friend and the Daily Mail said so, took out an 85% mortgage based on the rental income recieved.

Now, two years on, the payments have gone up, and Hobby has got their own residential mortgage to pay as well.

FTB's are not in the market to buy, so they want to rent. As there are lots of Hobby's out there, competition is currently driving prices down.

Hobby, having two mortgages and one income, cannot afford to maintain both.

Professional Investor meanwhile, waits for Hobby to default, and snaps up the property for his portfolio. Also, as Prof is seeing many Hobby's diving out of the market, snaps up more at a lower price.

Professional buying more B2L property gets the market moving by letting some of the Hobby's to trade upwards on their residential property, therefore kickstarting the whole process.

See?

Lovely theory, but sadly doesn't match the facts, that rental prices are coming down.

Shame.

trulysaintly

carolt wrote: »

Sorry, if you have been an estate agent for the last 13 years, you have never seen the market in freefall as it is now. If you said you remembered the last downturn and could back up your argument that things are different this time, then I'd take your views more seriously. As it is, because prices have always risen since you started working, you fall into the trap of imagining that that's how it will always be. Your professional experience has been gained during extremely atypical times.

I'm happy to take my financial advice from Mervyn King, say, who says exactly that, and that the last few years were an aberration not to be repeated.

I also fail to see how your argument suggests that buying now rather than when prices have fallen makes no difference to FTB's, as in your example, if I can save 10% of the purchase price plus associated interest costs over 25 years, that is a lot of money. It may seem insignificant to you, but speaking as the one who'd be putting my cash on the table, it is not to me.

Obviously, you'd like to persuade FTB's that it doesn't matter when they buy, so you can sell more mortgages now. That doesn't make it true.

Firstly, I am not and have never been an Estate Agent so I need to correct you on that one.

Secondly, although you claim that my experience is earned through rising property prices, I have also seen a great deal of interest rate fluctuation during that time, and as my experience has also been gained from working as an Underwriter with a high street lender, I DO know what I am talking about in the mortgage market.

If you understood the basics of Negative Equity, you would appreciate my point. The fact that you haven't grasped the fact that unless you try to sell during falling property prices you won't lose out says it all.

Also, at the moment, asking prices have already fallen around 10% from this point last year (on average across the UK, because that's what the papers say ) -therefore you are already on the way to being protected from huge losses.

The only way to really lose out at the moment would be to offer full asking price. Even if prices drop another 10% next year, there are already predictions being thrown around that prices will go up about 25% in the next five years.

Which would make you a homeowner with 15% equity - not bad eh? By then you won't give a stuff about FTB's because then you'll be alright.

Which, after all, is your current argument - it's not right for you at the moment, so everyone else deserves abuse for differing views.

Take the red mist goggles off, take a deep breath. Life isn't that bad.

See? A structured response for you without losing my temper. Which is hard, because you come across as a very resentful person.

Sorry.

trulysaintly

carolt wrote: »

Lovely theory, but sadly doesn't match the facts, that rental prices are coming down.

Shame.

Oh yes, the facts......

That you read somewhere....

That makes it real then.

Jumping_Bean

trulysaintly wrote: »

Well if those are your concerns, you are not alone. That doesn't however give you the right to conclude that property prices will continue to fall - it's all hearsay at the moment.

I take it that you've looked at a house prices to average incomes graph? And your conclusion is that further falls are hearsay?

trulysaintly wrote: »

However, if this is to be a 'home for the future' and you are not planning to move again for, say three years, what issue would you then have if values dropped by 10% anyway in the next 12 months if you're not looking to move?

Simple question: How much money would you prefer to owe? £10 or £20? £200,000 or £300,000?

trulysaintly wrote: »

Expecting the market to drop 30-40% just because it suits you doesn't make it realistic.

Just because it suits some people doesn't make it unrealistic either. I take it it doesn't suit you? Therefore you think it's unlikely?

trulysaintly wrote: »

Lenders will not go back to a model of 3x income for mortgages because wages haven't kept up with house price inflation

It's thinking like this that has made this housing bubble so large.

That sentence should read: House prices will fall because wages haven't kept up with house price inflation.

Where else do you think the money ultimately comes from to buy houses if not from wages?

carolt

carolt wrote: »

Er, no.

See lengthy thread here on falling rental prices:

http://forums.moneysavingexpert.com/showthread.html?t=1070595

Any landlord who wants to buy into that and increase rental pool further, so reducing prices further, is more than welcome, as far as I'm concerned.

As you missed it earlier, trulysaintly, please read and refute the evidence in this thread. Or are the mere 'journos' at the FT not worthy of your perusal? How could they know more than a Mortgage Advisor?

And no, you still haven't explained why it's in my interest to buy now rather than when prices have fallen further. You seem to have fallen into the easy mistake of confusing FTB's with existing homeowners. I'm not arguing for one second that falling prices need affect existing homeowners; as long as they sit tight and can afford their existing mortgages, they should be fine. But there is absolutely no logic in FTB's choosing to enter the market at a higher price, unless they are convinced prices are just about to rise - which I am certainly not.

You seem to be the one with rose-tinted specs re house prices. You see fit to advise others generally - FTB's like myself, the most vulnerable sector in a falling market - to risk their financial security buying now; I only explain why I think it would be extremely foolish for me to do so now. You seem to have let your day job give you a sense of over-importance; in this forum, whatever some might like to see, we are all equals, and like it or not, my view is as valid as yours. If someone wants to pay for your advice, that's their lookout - it doesn't mean you have the right to preach from on high to me about when I should buy a house.

trulysaintly

carolt wrote: »

As you missed it earlier, trulysaintly, please read and refute the evidence in this thread. Or are the mere 'journos' at the FT not worthy of your perusal? How could they know more than a Mortgage Advisor?

And no, you still haven't explained why it's in my interest to buy now rather than when prices have fallen further. You seem to have fallen into the easy mistake of confusing FTB's with existing homeowners. I'm not arguing for one second that falling prices need affect existing homeowners; as long as they sit tight and can afford their existing mortgages, they should be fine. But there is absolutely no logic in FTB's choosing to enter the market at a higher price, unless they are convinced prices are just about to rise - which I am certainly not.

You seem to be the one with rose-tinted specs re house prices. You see fit to advise others generally - FTB's like myself, the most vulnerable sector in a falling market - to risk their financial security buying now; I only explain why I think it would be extremely foolish for me to do so now. You seem to have let your day job give you a sense of over-importance; in this forum, whatever some might like to see, we are all equals, and like it or not, my view is as valid as yours. If someone wants to pay for your advice, that's their lookout - it doesn't mean you have the right to preach from on high to me about when I should buy a house.

Sorry Carol, but you are beyond help anyway because you don't listen.

You will never find the most opportune moment to buy in your FTB dream world - why? Because your argument is based on what you read and that alone.

What are you going to do if in 12mths the papers say - BUY NOW! Properties are going up in value?

Simple - you'll buy because you believe what you read rather than what you know. All of your posts having a dig at me have been backed up with press comment. Which is based on what? Three years as an apprentice attending Journo College, covering fetes?

If property prices continue to fall, then yes you MIGHT benefit. But you have no way of knowing if that would happen.

You just have to be an adult about it, make your own decision, and live by that decision without resorting to blaming everyone else.

WTF?_2

trulysaintly wrote: »

Sorry Carol, but you are beyond help anyway because you don't listen.

You will never find the most opportune moment to buy in your FTB dream world - why? Because your argument is based on what you read and that alone.

What are you going to do if in 12mths the papers say - BUY NOW! Properties are going up in value?

Simple - you'll buy because you believe what you read rather than what you know. All of your posts having a dig at me have been backed up with press comment. Which is based on what? Three years as an apprentice attending Journo College, covering fetes?

If property prices continue to fall, then yes you MIGHT benefit. But you have no way of knowing if that would happen.

You just have to be an adult about it, make your own decision, and live by that decision without resorting to blaming everyone else.

You make your living selling mortgages, right?

So it benefits your income directly if you can convince people that the market is strong and they should borrow eye-wateringly colossal sums of money to buy into it, right?

'Nuff said.

trulysaintly

!!!!!!? wrote: »

You make your living selling mortgages, right?

So it benefits your income directly if you can convince people that the market is strong and they should borrow eye-wateringly colossal sums of money to buy into it, right?

'Nuff said.

Well actually, yes it does affect my income, although not directly as I not paid solely on commission.

However, I only post on here because I would like to help people, however I am a nice person who wants to help people and offer opinions.

However, as recently all I have experienced is certain individuals with NO experience of buying or selling, who plainly talk out of their rear ends and abuse others because they disagree with people, I am not going to post anymore on this forum.

So you can all talk yourselves into suicide over life and wallow in self pity - which on the whole is all you deserve.

Adieu

carolt

What a great guy. He'll be much missed, I'm sure. No idea how we'll make up our own minds without his polite and constructive feedback.