Nationwide Nov08: -0.4% Mom, -13.9% Yoy

dopester

Topcat10 wrote: »

Thanks for that:rolleyes:. I don't know what nightmare place you are living in so I can't comment. Big deficits seem to be the order of the day. Japan has a deficit of 195% and it gets along fine. Life continues whatever the deficit, people move house what ever the deficit. I don't think couples sit down and chat about the size of the national debt when considering moving house, well no-one I know anyway.

One of the best school catchment areas as it happens, but I expect funding to be scaled right back over the next 5 years.

Well running such high national debts depends on the willingness of the market to lend. That is right. The Government has to ask the market to buy gilts. The market sets the price it wants for the yield, not the Government.

And at the moment the market wants higher returns for the debt the UK Government wants to borrow, making it more difficult to service. And the insurance to cover the borrowings is sky-high, in case UK Gov defaults. We shall see if the market has the appetitive to let UK Gov to borrow itself to debt oblivion - because there are signs the market is uneasy about the debt levels and ability of UK Gov to service their obligations.

andys15

dopester wrote: »

Fine. By not selling... by remaining where you are.. that doesn't lock in prices. If near identical property across the street sells for £50,000 less that you had in mind for the value of your property, then next door sells for £100,000 less 12 months later, and then one just up the same street sells at £175,000 less 18 months on... all of that crashes the market value of your own property.

You do realise this simple truth yes?

dopester,
you are missing the point. most people in a home with a family, couldn't give 2 hoots if the property is falling in value as long as they dont need to move. there is so so much to life, you only live once and you cant take it with you. (no more cliche). why uproot your family and STR to make a few quid, leave that to experts.

Cissi

baileysbattlebus wrote: »

We're in a similar position - we have a 5 bed house and the mortgage is about £500 pm, to rent a similar house would cost us at least £1500. And I know a lot of people like us.
A one bed flat here rents for around £600-650.

That's only part of the equation though. The important question is how much equity do you have in that house (something that could be difficult to know in today's market) and how much interest could that equity be earning if invested elsewhere = lost opportunity cost as mentioned by NDG (granted, this is also declining as interest rates go down).

We sold well before the peak (in 2005, because it suited us personally to move at that time). The money that we got from the sale is sitting in a high interest account, and the interest pays for a good part of our current rent in a much larger house. The remainder of our rent is less than the interest part of our previous mortgage payments so renting is definitely cheaper for us. At the time, there is no way we could have afforded to buy an equivalent house - it's looking like we soon will though :T

dopester

Topcat10 wrote: »

I don't think people with families think about that. They just think I need more space now/ better school now,etc - Then they think can I move? If the answer is yes they do it. They don't really care about house values - they just think can I meet the monthly payments.

We have always moved as our circumstances changed. Got pregnant - need a house. Had more kids - need a bigger house. We have moved boom or bust. I don't think we have ever thought about it as a money making exercise just getting a homee that met our needs.

I think most people are like this.

Good. Well that must be why we have record property sales or something innit. I think many people have treated their property as an investment but are being educated by the market.

andrewmp

baileysbattlebus wrote: »

Yes, I got the interest rate bit wrong - I think. It is still BoE + 1.58 for new claimants but it's about 6% for existing claimants.

Yeah, which is bad for all possible future claimants, I'm on a fixed rate and it's higher than the current BOE+1.58, if BOE drops further, which is likely, then I'd be knackered if I ever needed to claim this benefit.

dopester

andys15 wrote: »

dopester,
you are missing the point. most people in a home with a family, couldn't give 2 hoots if the property is falling in value as long as they dont need to move. there is so so much to life, you only live once and you cant take it with you. (no more cliche). why uproot your family and STR to make a few quid, leave that to experts.

Fine. If you treat your home as a home, not an investment, and are not whacked with debt, that is fine.

There are plenty of people I could have persuaded to STR, my mother included, but you are right there. To her, the property inflation of values over the last 30 years makes no difference. Just a house, and a house she likes to own. Doesn't matter to her if prices crash 70% whatsoever.

Topcat10

andys15 wrote: »

dopester,
you are missing the point. most people in a home with a family, couldn't give 2 hoots if the property is falling in value as long as they dont need to move. there is so so much to life, you only live once and you cant take it with you. (no more cliche). why uproot your family and STR to make a few quid, leave that to experts.

And how can you possibly predict which way prices are going when you believe that people see their lives in terms of profit & losses on their homes? They don't. They see homes with more space, bedrooms, gardens, family rooms. Furthermore, they want those things in a short time frames as kids grow up real fast:o. So the logic might be to wait around for years for the market to fall but in reality I think other considerations are more important to families, so they'll move regardless. I don't believe you can predict property prices just on profits Vs losses.

Topcat10

dopester wrote: »

Good. Well that must be why we have record property sales or something innit. I think many people have treated their property as an investment but are being educated by the market.

and I think you might be overstating the market value of homes in people's desire to move.

King_Of_Fools

BBC wrote:

That amounts to a drop of £25,000 in the past year, although the building society says prices are still £25,000 higher than they were in November 2003

So in the past year houses have lost half the amount that they gained in 5 years!

WTF?_2

skap7309 wrote: »

So anything less than a 1% fall means the HPC is ending? I personally put it down to the IR cut and the masses thinking it is the end and jumping in, or people ready to buy have seen the cut and thought 'now is the time'. Normal service (being 1%+ falls) resumed next month?

I don't think this means anything like the end but don't close your eyes to market developments.

Give it another 6 months and those 8 trillion dollars pumped into the system (so far, there's more every day) might start to show their effect.

If they do, then expect inflation - and therefore house prices - to gain pace rapidly. Anyone with cash is going to see its purchasing power start to decline rapidly. Inflation basically steals from savers and earners to give to borrowers and debtors.

Remember, sustained deflation would be the worst possible thing that could happen to the governments of the West (they are as indebted as the individuals) so they simply will do anything to stop it happening ... and they have control of printing the money. Sooner or later they'll kick off sharp inflation and you don't want to be caught napping.

In the meantime, just enjoy the fact that consumer prices are deflating for the moment, house prices deflating even faster and unlike many, you've got money in the bank.