Why interest rates will surge upwards.

Graham_Devon

whathavewedone wrote: »

I'm not moving any goalposts.

You mentioned a figure of 60-80k on the basis that the average house goes back to 3 x average salary which you consider to be around 20k.

You stated that the average house cost 60k in 1977.

So you ARE saying that you think it possible that at the end of this HPC the average house might cost what it did in 1977 and that the maximum price they will go for will be a mere 20k above that.

Compare the UK with NZ and Australia all you like, in case you haven't noticed they have a bit more land to build on than we have, that's why we will never have a housing market like theirs.

As for what you say about "people" not being able to afford to buy during HPI without 100 and 125% mortgages, I think you should amend that to read "some people". I don't know anyone who did that and those that did shouldn't have bought at all. Just because house prices were rising and 100% and 125% mortgages were available didn't mean that saving for a deposit was impossible. Quite the contrary given the fact that during that period most people had job security.

I managed to buy a flat in 2003 for 2.5 x my salary. Oh managed to buy too. As a result of HPI we were able to put a 25% deposit down on a 4 bedroom house with a mortgage manageable on one salary. It's simply nonsense to infer that everyone had to have 100 per cent mortgages.

Have you got a 100% mortgage?

We could go on all day long about minute details about "some people" and footballers. But I got bored of that. Of COURSE some people may be able to afford more than others. I didn't go over that because quite simply I didnt think I needed to as it's common sense.

I have a 90% mortgage. You keep reverting to my bottom figure, which is starting to get tedious. I gav a range, so you homed in on the very lowest part of the range and keep coming up with weird stuff about people earning 50-60k in 4 bed semis (also something which I don't see....these people, at least in my mind, are normally in detached 4-5 beds with a decent bit of ground).

I also never infered that everyone needed 100% mortgages. I said they were out there. Them being out there, and being used a lot, obviously means there was a need.

I'm not going to go round pretending that everyone in the UK has my financial standing, or that they are like me, or indeed, the same as other people using MSE. Some people needed 125% mortgages, some people had deposits. Some people had inheritances, some people didnt. Some people got lucky in a job, some people slave away trying their best. I'm not pretending to speak for you, or anybody else. It's plain common sense that some people can afford some things, your standing means nothing.

Generali

Graham_Devon wrote: »

I'm not a HPC user.

Sorry, I misread an earlier post. The OP (which I thought was you but wasn't) referred to an HPC thread. I assumed you were an HPC user Apologies for the misunderstanding.

Graham_Devon wrote: »

But I do love the way anyone on MSE who disagrees calls your either a daily mail reader or indeed here on these parts, a HPC user.

It's an easy way to dismiss someone's point of view. I think it's called affirming the consequent - idiots read the Daily Mail, you read the Daily Mail so you are an idiot. It's a fallacy but a seductive one.

Graham_Devon wrote: »

The cycle was literally taken from 1982 - 1986 - 2010.
All 14 years apart. It was a really simple analogy. Would probably be 2012-13 before we hit those prices I'm mentioning, if at all we do. It's just something, as a homeowner (already been accused of being a renter so clearing that one up), I personally can see happening.

That's 4 years and 14 years. Is there a typo somewhere?

whathavewedone

Okay I'm getting a bit bored too. Lets call a truce.

I live in Kent and here a salary of 50-60k wouldn't get you a 4/5 bed detached house with land. I wish! I know that it would in some parts of the country though.

Off topic, but I've always thought it unfair that tax credits are the same no matter what part of the country you live in. If you earn 15k in the north east you're a lot better off than someone earning 19k in the south east.

Graham_Devon

Generali wrote: »

That's 4 years and 14 years. Is there a typo somewhere?

Yer, theres a typo

1982 average house price £65,000.
1996 average house price £73,000.

2010 = 14 years after 1996. Just a simple analogy looking at history.

Dithering_Dad

Graham_Devon wrote: »

I think DD is basing it all on 3 people posting on this board.

That's a little unfair graham, I said that from what I had read on these boards that a lot of people had large deposits and I listed a few (three) of the ones I could remember. Did you perhaps expect me to list every one of them (and then no doubt, you'd be saying that I'm basing it all on 10 people posting on this thread ).

Anyway, I've created a 'what's your deposit' thread out of interest, to see what people have gotten saved up.

StevieJ

Generali wrote: »

Sorry, I misread an earlier post. The OP (which I thought was you but wasn't) referred to an HPC thread. I assumed you were an HPC user Apologies for the misunderstanding.



It's an easy way to dismiss someone's point of view. I think it's called affirming the consequent - idiots read the Daily Mail, you read the Daily Mail so you are an idiot. It's a fallacy but a seductive one.

I think it is a Daily Mail believer not reader

StevieJ

stevetodd wrote: »

I have to admit that I too have made the odd judgement error in my professional capacity in the past. However in my professional capacity (as a chartered quantity surveyor) my professiogement nal opinion would still represent at the very least a valid alternative scenerio to a non specialist person's opinion. This is all I am saying, that their opinion represents another valid alternative to interest rates shooting up to around 10%, this is by no means a certainty

Banks, odd judgement error :eek:

kt63_2

I think property prices will boom over the next decade in nominal terms (although they may fall slightly in real terms). I intend to move house later this year and will borrow as much as any bank is stupid enough to lend me (hopefully fixed over ten years at around 4%). The driving forces behind this boom will be different from the last boom. It will start with the super-rich looking for a return on the huge piles of cash that they have in the current environment of extremely low interest rates. For these people residential property in the UK is starting to look like an attractive long-term investment (particularly with the current weakness of Sterling). The boom will then be fueled by people looking to hedge against the high rates of inflation that we will see in the next 2-3 years as a result of the Government's "quantitive easing" measures (these are bound to be overdone as they have to fight an election within the next 15 months).

The result will be a big shift in patterns of home ownership. Only the relatively well-off will own their own homes. The rest of us will find ourselves renting off residential property investment funds owned by rich people.

Obviously this is complete speculation, but such a scenario would mean that historic data (based on 3.5 average earnings etc...) is irrelevant in predicting future prices.

nickj_2

Dithering_Dad wrote: »

Actually some loons were predicting a crash from 2001 onwards, and the HousePriceCrash website started up in 2003.

i would have thought that as soon as the average house price went thru the £100k mark we were on a slippery slope , the last hpc the average hp was less than £100k so had less far to fall ,
the signs for the inevitable crash were there- record consumer debt , the 125% mortgages etc , but the "experts " chose to ignore them and now we have to pay for their incompetence , they should have nipped it in the bud by putting up interest rates years ago
it is incomprehensible that they thought that continuous growth it would go on for ever and the fact that many of them are still in work is unbelievable

Dithering_Dad

pandamonia wrote: »

FTB 25% deposit? lol you are detatched from reality.

the uk average for money needed to buy a new home is 22k! thats all in!

most homes are between 100-150k for FTB,

you do the maths.

your arguments are always flawed

Even on my salary which is over twice the average UK salary i think taking out 117k mortgage for £750 per month 5 year fixed is very expensive. Once i factor in all the costs of a home then i start to realise just how overpriced these homes are.

Fact is that most people buying their first home now who "think" they can afford their home probably cant. They will hit big trouble in the coming years from all angles.

Strange that someone who only joined last month knows that my "arguments are always flawed" :rolleyes:

Anyway, I created a thread to ask people about their desposits (to see if I relly were 'detached from reality' and I think you'll be surprised just how many people on the MSE forums (and probably in the country at large) are saving like mad to make sure that they're not mortgaging their lives away to buy a house. Most of them seem to have over the 25% deposit that you chose to pilliory me about.

Dunno what your problem is, but it'd be nice if you could keep it civil. I have never been disrespectful to you, so I'd appreciate it if you'd reciprocate. Ta.