Homeowners with Trackers to face shock rise?

SingleSue

Erm, they are not THAT old! Some of their peers still have mortgages to pay, they were just lucky that they paid theirs off within 3 years of getting it. They also realise that property does not always go up, they had to see one of their children lose a home through repo in the last recession and do in fact realise that the value of their own home has reduced in value (not that it worries them in the slightest - it's their home and not a money cow).

And it is relevant as there is an awful lot of people out there who believe what the media tells them and just recently there has been an awful lot of this green shoots baloney...so to say everyone knows that prices have reduced is not correct.

hundredk

SingleSue wrote: »

You would be surprised at the amount of people who think falling prices and the recession doesn't actually impact upon them.

My parents (on reading the newspapers, listening to the radio etc) are now firmly in the belief that the recession is over and house prices are rising again....until I told them they are being sheeple, explained why and now they are questioning their belief.

For information, they do own a property, mortgage free for the last 35ish years and are aware their property has reduced in value. They couldn't quite get the hang of the idea that if a property sold for a lower amount that it would then have a run on effect on other similar properties in the area though.......

House values, like any commodity, are determined by supply and demand which are fundamental market forces - without either one there is no market. Demand is less because ppl can't get loans as easy as a few years ago but nevertheless it is the demand (or lack of) that is driving house values down.

A few years ago ppl paid "higher than market value" (more than the asking price) for properties because of easy finance and therefore perception that the value would continue to increase.

A property does not sell for "lower than market price" - the price is the value the market will stand at a particular point in time. It does not make all the neighbours properties worth less, it is just a reflection of what properties sold for at a particular time.

SingleSue

Yes I know that....I was (perhaps badly and too quickly) trying to explain that some people are not aware of how things work fully. I did explain as you have above to my parents, they didn't realise that prospective purchasers would now search various sites for sold prices recently and build that into their offers etc.

The actual discussion with my parents lasted for nearly an hour and went into the lack of availability of finance for some purchasers, previous house sales, interest rates etc etc...far too much to go into detail on here.

Gorgeous_George

SingleSue wrote: »

...My parents (on reading the newspapers, listening to the radio etc) are now firmly in the belief that the recession is over and house prices are rising again....until I told them they are being sheeple, explained why and now they are questioning their belief...

Did you ask if they were bothered? Do they look bothered? Are their faces bothered?

In their postion, I wouldn't be (bothered).

Of course, as your potential inheritance plummets, you could offer to be bothered on their behalf.

GG

SingleSue

Lol...no they are not bothered and neither am I to be honest.

Their house, not mine and any inheritance is of course subject to if they need care later on in life where the house would quite rightly be sold to cater for.

dopester

hundredk wrote: »

House values, like any commodity, are determined by supply and demand which are fundamental market forces - without either one there is no market. Demand is less because ppl can't get loans as easy as a few years ago but nevertheless it is the demand (or lack of) that is driving house values down. [Wrong; it is the lack of savings and mortgages/money to pay current asking prices, from FTBs, and even to BTLers, upwards]

A few years ago ppl paid "higher than market value" (more than the asking price) for properties because of easy finance and therefore perception that the value would continue to increase.

A property does not sell for "lower than market price" - the price is the value the market will stand at a particular point in time. [True]It does not make all the neighbours properties worth less, it is just a reflection of what properties sold for at a particular time.[Incorrect. You're happy to accept the gains in value of your property, as those active in the market buy at higher prices in the boom .A reflection of value for when other properties were being bought for more money. It works the same way on the way down. The reflection of value of properties are selling for at the current time, for all homes.]

You deliver the real reasons for why all property went up in value (buyers who were buying at ever higher prices via bigger mortgages), but you're deceiving yourself about falling values, because one home that sells at a lower price than in previous months or years, also brings down the values of other homes, including neighbours' homes.

StevieJ

dopester wrote: »

Didn't they win it last season, with a 1-0 loss at home to West Ham ? [scratch that - they were already Champions before the last match, I think, because of the guard-of-honour other teams gave them.]

They are still Champions. Didn't think Benitez showed any honour in what he said about them just having more points.

It would hold more water if they had at least reached a one or two semi-finals
Instead it could be Everton bringing the silverware to Liverpool this year.

baby_boomer

[Shock horror]

When your mortgage deal comes to an end you have to find a new one / move onto a new rate.

[/Shock horror]

Too many journalists, not enough news.

hundredk

dopester wrote: »

You deliver the real reasons for why all property went up in value (buyers who were buying at ever higher prices via bigger mortgages), but you're deceiving yourself about falling values, because one home that sells at a lower price than in previous months or years, also brings down the values of other homes, including neighbours' homes.

The reasons why properties go up and down in value is the same - demand. Demand is driven by desireability, and affordability - without both of those there is no demand.


To be able to afford a £50k house does not necessaily mean I buy if I dont desire it. Similarly if I desire a £1m property but cannot afford to pay for it then I also don't buy it. The reasons are different but the end result is demand is driven by ability to pay and desireability.

Ppl may find properties more or less desirable or affordable based on recent selling prices but all that is doing is changing the demand.

I don't think I'm disagreeing with you, just terminology. I have no need to deceive myself about falling house prices.

hundredk

dopester wrote: »

because one home that sells at a lower price than in previous months or years, also brings down the values of other homes, including neighbours' homes.

So a developer with 20 houses all identical new development. House 1 sells for £100k. The developer buys his own house 2 for £200k. Does that make the neighbours houses 3-20 worth £200k.