Why House Prices Aren't Going to Rise - From The Fool

Thrugelmir

mitchaa wrote: »

How does he save £10k?

Are you assuming 1 is paying a mortgage and the other is living rent free?

Not all FTB's are currently renting ( a lot still live at home ).

Thrugelmir

mitchaa wrote: »

Something experts didn't think would happen for another 3yrs or so.

Um. I don't think so.

Maybe a disagreement over when but certainly not 3 years.

No Government policy would be able to change the economy in a matter of months. And that's irrespective of party.

I thought Gordon was to busy saving the world at the G20.

But that's more likely to spin the news away from the true state of the British economy, which is dire by all accounts.

mewbie_2

Gordon's miracle seems to be to borrow more money, and then borrow even more. Incapable or unable to plan past the election. At some point the money will have to paid back. Recession may be technically over, maybe we have dropped as far as is reasonable for now, but when the debt hits the fan it doesn't feel good.

Can I liken it to losing my job, then finding 20,000 on credit cards to tide me over quite comfortably for a while. In twelve months time, still no job, a bigger debt, and in more trouble than I started. Brilliant.

Gorgeous_George

Let's get serious for a moment. You cannot compare buying a house of your own with leeching off your parents.

You can compare buying a house with renting a similar house. You cannot compare renting a flat with buying a 4 bedroom detached house. It's as stupid as comparing buying a Ford Focus and renting a Ford Fiesta only to decide that walking is cheaper.

You either need a house of your own or you don't.

GG

MrDT

mitchaa wrote: »

How does he save £10k?

Are you assuming 1 is paying a mortgage and the other is living rent free?

Err, saving £800 a month is doable even when you got rent to pay. I'm sure I'm not alone

mitchaa

MrDT wrote: »

Err, saving £800 a month is doable even when you got rent to pay. I'm sure I'm not alone

The same £800 will be savable when you've got a mortgage too then and each year you can pay £9600 off your balance as an overpayment:D

Chris2685

MrDT wrote: »

Err, saving £800 a month is doable even when you got rent to pay. I'm sure I'm not alone

Unless you're well paid for the area you live, no it's not...

If it is easy, please tell me how!!

Lotus-eater

mewbie wrote: »

Can I liken it to losing my job, then finding 20,000 on credit cards to tide me over quite comfortably for a while. In twelve months time, still no job, a bigger debt, and in more trouble than I started. Brilliant.

Ahh yes, but Gorden is planning on you getting a job within those 12 months, therefore you can carry on the lifestyle to which you are accustomed for those 12 months and after that manage to keep up with the payments on the loans you have,
You then have to have several years where the lifestyle has to be trimmed back, quite alot to start with, then less in the years after that.
A few years down the line your lifestyle will be back where it was before with small payments.

Of course....... if you'd saved some money when the times were good, maybe your lifestyle wouldn't have been quite so outragous, but you could have managed the year out with no problems or adjustment.
Or........ you could have radically scrimped during the 12 months off and had a lesser bill to pay at the end,

Of course as you say, if you don't get a job, you are royally bu@@ered.

Generali

mitchaa wrote: »

Perhaps you can direct me to any post that depicts any notion of HPI starting all over againWhat the bulls are getting at from what i was reading, is that they can see clear stagnation.

5 Months worth of figures being the same is more than just noise?

Recession is over next month in its definition, im sure you and many other bears were all in the 2012/2013 camp but yet Gordon Brown has pulled it out of the bag in just 3-6mths:rotfl:

We will see house prices drop in June that is a certaintly due to the 2% rise in May. The bears will get hope that things have returned to normal and July figures will be released and will show an increase. Just like now, instead of 5mths worth of stagnation, it will be 7 in 2 months time. Either that or things really will settle down at +/- 0.5% monthly up and down.

To be a winner in this, you clearly need to be buying into the stagnation market at the right time, as we all know where interest rates are going;) A £150k mortgage may cost me £1000pm now but the same £150k may cost me £1250pm this time next year.

Its not about missing the boat on purchase price as much now, its more so with missing the boat at the right time to buy due to interest rates.

The market may well fall another 10% but would there be any difference to your monthly mortgage payment?

£150k now in June 09 with IR @ 4% = £800pm
£135k in June 10 after 10% drop but with IR @ 6% = £880pm

http://www.thisismoney.co.uk/interest-rate-rise-calculator

Think about it

I think it's a little unkind to dismiss me as a bear. I try to keep as open a mind as possible (although I still think that UK house prices are too high) and I rarely, if ever, defacate in the woods.

5 months of house price rises is more than noise, you're right. Whether that translates into a sparkling recovery in the real economy is another matter.

History tells us that unemployment is likely to continue to rise for 2 years after the end (if that's what it is) of the recession.

In terms of missing the interest rate boat, I think you're spot on. If Governments across the world are going to continue to borrow at the rate they predict then interest rates may well rise and fast.

Personally, I don't think now is a bad time to buy a family home. Even a year or 2 ago needn't have been a bad time to do so - any losses get measured over a very long time of you're buying a place that you plan to live in for 30 or 40 years and end up negligible.

I still think house prices are too high in the UK and will fall. I also think that any recovery in the economy is likely to be short lived due to structural problems and also the policies of the UK and other Governments.

mewbie_2

Generali wrote: »

Personally, I don't think now is a bad time to buy a family home.

Buying a family home implies that you either have a family or are planning to start one. So perhaps there are more important things than money to consider. But buying a house to get onto the housing ladder is a different story, there really is no need to rush.

We have had 20% shaved off a most overblown bubble, and are facing years to get some sort of proper recovery. There's been too much sun on a few bulls heads recently.