nationwide down 1.9%

justpurchased

dopester wrote: »

There is a disclaimer at the bottom of the page - but I'm right anyway unfortunately.

And please, I'm not having a go at you, but it really infuriates so many people....

If it is loose, then tighten it. Loose rhymes with noose (rope type). You mean lose / losers.

1 All;) score draw. I corrected some one it earlier. doh.

justpurchased

Generali wrote: »

I suspect that the main winners of the bust are going to be holders of cash. At least they will be if deflation happens - a real risk IMO.

I think the main point is if you buy a house live in and pay the mortgage off, you are mortgage free at the end.
The only thing the bust and boom cycle dictates is how much you pay for it.

Generali

justpurchased wrote: »

I think the main point is if you buy a house live in and pay the mortgage off, you are mortgage free at the end.
The only thing the bust and boom cycle dictates is how much you pay for it.

It's true. Also, if you discount the difference in price over 30 or 40 years the amounts are pretty small.

However, if you default or need to move then the equity:value relationship is suddenly very important.

WTF?_2

Generali wrote: »

I suspect that the main winners of the bust are going to be holders of cash. At least they will be if deflation happens - a real risk IMO.

That's if the banks holding their cash don't go bust.

And you can bet that the central banks will be literally flooding the markets with cash to fight deflation : That's why we have fiat currency in the first place. I wouldn't bet on cash holding or increasing its value, much as it would personally suit me.

My guess is we'll see stagflation. Essential things getting ever more expensive relative to incomes and savings and people basically being made a lot poorer against the background of economic recession.

Still, better to have savings than debts.

Generali

!!!!!!? wrote: »

That's if the banks holding their cash don't go bust.

And you can bet that the central banks will be literally flooding the markets with cash to fight deflation : That's why we have fiat currency in the first place. I wouldn't bet on cash holding or increasing its value, much as it would personally suit me.

My guess is we'll see stagflation. Essential things getting ever more expensive relative to incomes and savings and people basically being made a lot poorer against the background of economic recession.

You may be right. The trouble with the future is that it's tough to predict! Certainly many more economists and others agree with your viewpoint than mine.

Having said that, a decade of free money didn't do much for the Japanese economy although there's an argument that the carry trade (borrowing money in one place at a low interest rate and investing it in another at a higher rate) is a major source of the funds that have been used to bid up prices.

!!!!!!? wrote: »

Still, better to have savings than debts.

This should be written above the door of every bank in the country!

WTF?_2

justpurchased wrote: »

I think the main point is if you buy a house live in and pay the mortgage off, you are mortgage free at the end.
The only thing the bust and boom cycle dictates is how much you pay for it.

If you overextend yourself to buy the house then you put yourself in a very sticky situation indeed. You may not be able to keep the house long enough to see a profit or to have a nice rent/mortgage free house to retire in, as well as ending up in considerable personal debt or bankrupt. Certainly you'll find yourself in an extremely uncomfortable position come a recession and drop in property prices even if you manage to hold on to the house and in any event your personal disposable income is going to be squeezed hard.

Really, this is MoneySavingExpert - why some seem to think overpaying to the tune of tens of thousands of pounds for a house is OK is beyond me.... :rolleyes:


Remember - cash in the bank or in investments earns you more money. Debt costs you money to service until you have it all paid off. With house prices falling sharply and set to fall further I know which of these situations I'd rather be in: Renting and saving money vs buying and having to service a very large secured debt.

WTF?_2

Generali wrote: »

Having said that, a decade of free money didn't do much for the Japanese economy although there's an argument that the carry trade (borrowing money in one place at a low interest rate and investing it in another at a higher rate) is a major source of the funds that have been used to bid up prices.

How much of the cheap credit from Japanese banks found itself in the hands of ordinary Japanese consumers? AFAIK the Japanese faced pretty high rates of interest if they were borrowing from their banks. Meanwhile, big Western financial institutions snapped up ultra cheap Yen loans and set the carry trade going and helped inflate western markets.

This is the problem - you can pump money into the system but the big boys of finance will simply take it and use it for their own purposes.

If you are going to go for inflating the money supply, probably the best way to give out your inflated lolly is in the form of swingeing tax cuts. At least that way ordinary people get to see some of it.

Generali

!!!!!!? wrote: »

How much of the cheap credit from Japanese banks found itself in the hands of ordinary Japanese consumers? AFAIK the Japanese faced pretty high rates of interest if they were borrowing from their banks. Meanwhile, big Western financial institutions snapped up ultra cheap Yen loans and set the carry trade going and helped inflate western markets.

This is the problem - you can pump money into the system but the big boys of finance will simply take it and use it for their own purposes.

If you are going to go for inflating the money supply, probably the best way to give out your inflated lolly is in the form of swingeing tax cuts. At least that way ordinary people get to see some of it.

IIRC, the Japanese government borrowed prodigiously in an attempt to get their economy going and spent yet more on propping up the banks. Neither thing worked although I suppose things could have been worse if they hadn't done it.

sdooley

!!!!!!? wrote: »

probably the best way to give out your inflated lolly is in the form of swingeing tax cuts. At least that way ordinary people get to see some of it.

No, cash handouts like GWB's $200 a head or Brown's tax credits. If you give money to the poor, it will be spent, tax cuts always go predominantly to the rich.

justpurchased

!!!!!!? wrote: »

If you overextend yourself to buy the house then you put yourself in a very sticky situation indeed. You may not be able to keep the house long enough to see a profit or to have a nice rent/mortgage free house to retire in, as well as ending up in considerable personal debt or bankrupt. Certainly you'll find yourself in an extremely uncomfortable position come a recession and drop in property prices even if you manage to hold on to the house and in any event your personal disposable income is going to be squeezed hard.

Really, this is MoneySavingExpert - why some seem to think overpaying to the tune of tens of thousands of pounds for a house is OK is beyond me.... :rolleyes:


Remember - cash in the bank or in investments earns you more money. Debt costs you money to service until you have it all paid off. With house prices falling sharply and set to fall further I know which of these situations I'd rather be in: Renting and saving money vs buying and having to service a very large secured debt.

Did anyone say anything of overstretching. Also Neverdespair girl stated her parents purchased a house in 1983 for arround £73K it is now worth arround £1M. What would £73K in a bank do over that period(but if you had £73K then you would of paid for the house in cash)!
I could not rent a equiverlent property as mine for less than my mortgage. My Rent would be £1300 Mortgage is £1000 (repayment before anyone starts), So I can afford to save £600 a month i could only do £300 if I rented.
renting is not cheaper for everyone.