Are we in a boom ?

System

mbga9pgf wrote: »

Well, unfortunately due to greedy Sh*ts pricing most of the younger generation out of housing, the dream of working your own little garden are little more than a pipe dream, for many including myself at the moment. Unless you want to live in a flat the size of a postage stamp.

I understand the importance of life and dont think I dont know what you are getting at, I do. I just find it very frustrating at times that the greed of one generation has scuppered the next.

All differences aside, with a 70k deposit you are not even close to being priced out. You could have a very nice place on a microscopic interest rate that would easily be less than renting, and you're not going to lose 70k's worth of equity despite what the fantasists say.

If you wait for that extra 10% drop, what's does that equal in "money in your pocket" terms? £40 a month as a guess? Assuming rates don't increase by then of course.

JayScottGreenspan

mbga9pgf wrote: »

Well, unfortunately due to greedy Sh*ts pricing most of the younger generation out of housing, the dream of working your own little garden are little more than a pipe dream, for many including myself at the moment. Unless you want to live in a flat the size of a postage stamp.

I understand the importance of life and dont think I dont know what you are getting at, I do. I just find it very frustrating at times that the greed of one generation has scuppered the next.

I understand your anger. Housing booms insidiously force people to take increasingly large gambles with their wealth. You're an FTB in 2007 - do you wait and risk prices getting even further away from you, or do you buy and risk losing a bundle? Housing booms make gamblers of us all, whether we like it or not.

Some people would like a stable housing market. Some people want the freedom to buy a property when the time is right for them. Some people don't want to have to read the FT everyday and follow the markets to make sure their decisions about the property market are not jeopardising everything they ever worked for. Some people think that's the govt's job. Some people don't want to be forced to bet tens of thousands in the housing-market-casino. But they have no choice if the govt let house prices get out of control.

It's tempting to blame the older generation, especially when they trot out the tired old rubbish about how 'it was never easy' or 'young people these days want everything straight away'.

It's tempting to blame them. But don't. They may be severely deficient in the empathy department, but they are merely pawns in the market.

If you want someone to blame, blame this man:

Gordon Brown, 1997 Budget speech:
“I will not allow house prices to get out of control and put at risk the sustainability of the recovery”.

Gordon Brown, 1998 Budget speech:
“Booms channel too many resources into speculative activities and not enough into others, hampering economic progress. The fleeting gains that such episodes bring are invariably far outweighed by the pain of the downturn that must follow.”

Gordon Brown, 2008 interview:
"We've seen house prices rise by about 180% over the last 10 years and they have risen by about 18% over the last three years, so a 2.5% fall is something that is containable."

mbga9pgf

Joeskeppi wrote: »

All differences aside, with a 70k deposit you are not even close to being priced out. You could have a very nice place on a microscopic interest rate that would easily be less than renting, and you're not going to lose 70k's worth of equity despite what the fantasists say.

If you wait for that extra 10% drop, what's does that equal in "money in your pocket" terms? £40 a month as a guess? Assuming rates don't increase by then of course.

ITs over 200 quid a month on a 10 year fix at 4.99%
On a 15 year mortgage.

tommy75

Dan: wrote: »

mbga9pgf - You belong over at HPC.co.uk with the other minimum wage losers desperate for home ownership. Things tend to be a little more realistic on here.

Dan is right. We should have slums in all cities for the majority of first time buyers who are on under 24k a year. It works in 3rd world countries doesn't it.

Dan:_4

tommy75 wrote: »

Dan is right. We should have slums in all cities for the majority of first time buyers who are on under 24k a year. It works in 3rd world countries doesn't it.

We have - they are called council estates.

Dan:_4

MrDT wrote: »

You said that "mortgage rates are likley to rise, and could rise fast - this will end up costing you more by holidng off now"

mbga said that in fact it won't cost him more and put forward his thoughts on what will likely happen should rates rise: "Just worked it out this morning, rates could go up to 10% and I would still be quids in saving, in fact over 2 years, I will shave 3 years off the mortgage and pay 200 a month less for themonthly mortgage. This is for the same mortgage value.The theory goes though, if rates go up significantly, the resulting fall in prices will mean I take out even less of a mortgage and shave far more than 3 years off the total term. If mortgage rates rise rapidy, repos will spike through the roof and prices will have much further to fall. I continue saving and prices level (as they have done for the past 3 major corrections) I still wipe a massive chunk off the mortgage and have far less to pay."

You then state that mbga is "hoping for rapid interest rates rises in order to increase repo's and cause house prices to fall significantly" and that this is a huge gamble.

I can't see anywhere that he's hoping for rates to rise so he can benefit from repos, to me it looks like he's pretty much ok regardless what happens to mortgage rates.

I suggested that getting a low rate mortgage product now will cost less in the long run then waiting for another (dunno maybe 5ish%) to fall from house prices. When interest rates rise, these products will become a lot less attractive, and the extra in monthly repayments will soon out way the savings made by getting the property 5% cheaper.

It seems mdga would rather gamble that rates will go sky high, and cause mutiple repos, thus lowering average prices much more.

Out,_Vile_Jelly

Dan: wrote: »

Im sorry, but home ownership is not for everyone. Never has been and never will be. Some people, who earn a below average salary, think they have the 'right' to buy property.

Out of interest, what quantifiable scale do you think should be used by which people are allowed to ascend to the saintly pedestal of home ownership? Does anyone know what the average London salary is, so Dan can judge my status?

Dan:_4

Out,_Vile_Jelly wrote: »

Out of interest, what quantifiable scale do you think should be used by which people are allowed to ascend to the saintly pedestal of home ownership? Does anyone know what the average London salary is, so Dan can judge my status?

Its very simple: Like anything else in life - you can either afford it, or you can't.

ad9898_3

Just got in and read this thread, quite a bit of anger/bitterness on both sides of the debate, why ?, there really is no point, no one is going to convince anyone on the other side to swap sides, if you know what I mean. Everyone knows where I stand in the debate, and I feel no anger or bitterness at all, if you want to buy now, your pretty much gauranteed to find a property that you can knock off 25% of the peak price, this has to be result for anyone who wishes to buy now, compared to 2 years ago.

Like anyone else I have no real idea of where things will go, going forward. 7 months ago we were only hours from complete economic meltdown that was never seen before, things have obviously improved since then, however the economic news in front of us is still dire, although probably not as bad as last autumn. One thing is for sure there is absolutely no evidence out there that prices are increasing, that alone should be enough for any HPC'r, keep saving, any appreciable HPI is dead, probably for about 8 years at least. Just step into the market when it suits, for me that will be 3 years, don't panic, don't get angry just keep saving (says me who has just spent 2.5k on a mountain bike....doh!:D)

mbga9pgf

Dan: wrote: »

I suggested that getting a low rate mortgage product now will cost less in the long run then waiting for another (dunno maybe 5ish%) to fall from house prices. When interest rates rise, these products will become a lot less attractive, and the extra in monthly repayments will soon out way the savings made by getting the property 5% cheaper.

It seems mdga would rather gamble that rates will go sky high, and cause mutiple repos, thus lowering average prices much more.

Dan, you are wrong. I have worked this out, I am not making it up; even if rates went up to 10%, I am still better off saving. I am working of a minimum 10 year fix, thus the current 5% rate I am planning on getting means I am still better off by saving. I have done all my sums, believe me!