Number Of People Buying Homes Jumps 29%

dopester

chucky wrote: »

sort of... because sellers can (in the majority of situations) be able to wait to sell.
if they can't wait, they have the options of letting the property or refusing to sell.

i don't think renting or even living with parents can be done for ever - but that's just my opinion.

They can wait, let the property, or just enjoy living in perhaps mortgage free homes.

The values don't stay steady at peak though. The values are entirely dependent upon what those who choose to sell and buy. With the prices they agree to sell and buy at.

chucky

dopester wrote: »

Letting or refusing to sell.

Tell my Chucky. Do they expect their homes to have held value, when the last home in the street sold at £140,000? Then in 2011 another homeowner on the street sells at £120,000 to a new buyer.

It would be very hard for any owner to consider the value of their home to be still worth £200,000 peak value, or even £170,000 don't you think, when next-door sold for £140,000 of £120,000.

no of course property will not maintain it's value i've said it in the previous post.
as i said previously sellers will either take their property off the market or let it if they believe that they can't get their expected asking price.

dopester wrote: »

When homes are gradually selling for less and less money over time.

i have a problem with this bit - where historically house prices have always recovered after a HPC. some have taken longer than others.

1991 HPC took a number of years and the 1981 recession was 26 months from peak to peak. it's my view that sellers can afford to wait or let their property until recovery or even a flattening out of property values.

confused31_2

Joeskeppi wrote: »

Are people who post stuff like this actually expecting a complete reversal in a one month period, or do they just enjoy stating the utter obvious?

Edit: That's that answered then.

Im not being funny but the situation could be turned on its head in a matter of months, the interest rates came down really quick, thats probabaly why a few people have bought, but this could all be reversed in 3 to 4 months, if the rates do go up.

My only tip for people who buy now would be get on a good long fixed deal, at least then, you will be secure in the next few years.

A lot of people predicted rates to go up in 2008 and expected a lot of forced sales from people who bought in 2006-7 has ot happened, by lowering the interest rates, it as slowed this process down, but it will come, its just when?

I wouldnt be surprised if it will be the conservatives, who will probably win the election and then have to put interest rates up and force people out of their homes, you could imagine labour then blaming then for the mess.

mr.broderick

confused31 wrote: »

They dont play anymore because most of them are surviving with the low interest rates, when rates start to go up, that is when you will see house prices fall again, this is just a blip, people may be jumping in now, but there will be more falls, i thinks its just a lot of impatience from people who want to jump in now.

I think if interest rates go up above 3% you will see a glut of properties come on the market at bargain prices, these will be from the people who bought in boom time and will need to get rid has they wont be able to secure any good mortgage deal, as they will have no equity.

Its all about timng.

Anyone who borrowed £150k on a 2 year fix at 5.5% who can't afford it at 7% shouldn't have been lent the money in the 1st place.

scousethife

chucky wrote: »

quite an unexpected jump in the number of loans...









this is the most interesting bit - who was it that keeps on saying that First Time Buyers couldn't afford or were staying out of the market?

That'd be the other FTBers who arnt going to get repod within the year, by not buying at ridiculous prices.

scousethife

confused31 wrote: »

I wouldnt be surprised if it will be the conservatives, who will probably win the election and then have to put interest rates up and force people out of their homes, you could imagine labour then blaming then for the mess.

Labour are still blaming the tories for things 11 years ago.

I mean, if you cant sort something out in 11 years then they really are admiting they aint up to the job.

Not that anyone does anymore, its just some took longer to spot they are useless than others.

dopester

chucky wrote: »

1991 HPC took a number of years and the 1981 recession was 26 months from peak to peak. it's my view that sellers can afford to wait or let their property until recovery or even a flattening out of property values.

Ok Chucky. I'll accept that response and the proven historical evidence you've got to back it up.

We differ only in expectations for values and recovery. I think this is the recovery (values falling).

confused31_2

mr.broderick wrote: »

Anyone who borrowed £150k on a 2 year fix at 5.5% who can't afford it at 7% shouldn't have been lent the money in the 1st place.

its not just that people are losing jobs, they may have been able to pay it two years ago as they were earning more money.

What im saying is at the moment they may be able to afford their mortgage even without working especially if they are on a 0.5 tracker.

Its when the rates go up then people who have been hanging in there will have to bail out.

Thats why im saying when rates go up there will be loads of reposessions and forced sales.

confused31_2

chucky wrote: »

i have a problem with this bit - where historically house prices have always recovered after a HPC. some have taken longer than others.

1991 HPC took a number of years and the 1981 recession was 26 months from peak to peak. it's my view that sellers can afford to wait or let their property until recovery or even a flattening out of property values.

House prices will always recover and i agree with this, it may be slow but they will recover its just waiting for house prices to hit the bottom first.:rolleyes:

dopester

confused31 wrote: »

its not just that people are losing jobs, they may have been able to pay it two years ago as they were earning more money.

What im saying is at the moment they may be able to afford their mortgage even without working especially if they are on a 0.5 tracker.

Its when the rates go up then people who have been hanging in there will have to bail out.

Thats why im saying when rates go up there will be loads of reposessions and forced sales.

Rates for existing borrowers should not shoot up.

If you're looking for existing home-owners to be pressured in to paying very high rates of interest on their mortgages in this economic climate, just to further the crash, so more of them lose their homes... it is a bit overly focused on your own ambitions to get a cheap home.

There is quite a lot of supply. As buyers we don't need people losing their homes by very high interest rates to further our own ends. The economy comes first.

Existing homeowners are already selling their homes for lower prices, month after month. That is why the values of all homes fall for all. The supply is there, and people will eventually sell at lower values, year after year. We don't need individuals and families broken by penal rates of interest, just to increase what is on the market at cheaper values. Values will and are plummeting anyway.

One of the reasons interest rates are so low is that assets such as houses are depreciating in value. If house prices are rising, you are forced to pay a price for your gains. When they are falling, banks are grateful just for the repayment of principal. What you gain on the cost of your mortgage you more than lose on the size of your debt, which is inflating relative to your equity and income.

For years, the dynamic has worked like this. Say you spent £100,000 on a house using £50,000 of mortgage finance and £50,000 of equity. By the time you came to sell the house, the price might have doubled to £200,000. If you kept the same proportion of debt to equity, you would then have £300,000 to spend on your next house.

That process has now gone into reverse. If house prices fall by 25 per cent in value rather than double, your equity would be worth just £25,000 but you would still have the same quantity of debt. Assuming you kept the same debt-to-equity ratio for your next purchase, the maximum you would pay would therefore be £50,000.

OK, so in practice, the housing market is quite unlikely to conform to such an artificial model, but what is true is that once a deflationary debt spiral takes hold, it's very hard to get rid of. The process of asset depreciation becomes self-feeding and the debt burden assumes ever more monstrous proportions.