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Debate House Prices
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"Why I hate high house prices"
Comments
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Low house prices lead to lower mortgage costs which lead to higher levels of disposable income because people don't need to take out 5 times joint income for a starter home. Simples.
Seeing as how you have made an effort to put some reasoning into your post, beyond your usual offensive trolling, I'll respond.
You seem to have a misguided and overly simplistic view of things. Do you actually believe that money spent on housing is somehow "unproductive"?
This would of course be true if we all lived forever, but perhaps you have heard of this little thing, we call it "death", that ensures constant churn of housing investments......
As FTB's enter the system, so LTB's exit at the other end.
The houses get sold, the money churns back into the economy, and we all start again.I still don't know whether you actually believe the !!!!!! you type or if you are trolling.
Whereas I know for a fact that you are just trolling.I agree that deposit size is a issue but it's a function of the house price. If the average house price was 100k like it should be, the deposit is much less of an issue. If you are suggesting that we return to 100% mortgages then you are an idiot.
Pre crash buyer. To get excellent rates needed only a 10% deposit. 150K house, deposit of 15K.
Post crash buyer. To get excellent rates now needs a deposit of at least 25%, and more like 40% in most cases. 100K house requires deposit of 25K to 40k.
Even in your fictional 100K scenario after 33% falls, (as the average fall is now only 13.8%) the deposit is still a far bigger barrier to entry for FTB's.
A big enough barrier that most will be locked out of housing.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Pre crash buyer. To get excellent rates needed only a 10% deposit. 150K house, deposit of 15K.
Post crash buyer. To get excellent rates now needs a deposit of at least 25%, and more like 40% in most cases. 100K house requires deposit of 25K to 40k.
Even in your fictional 100K scenario after 33% falls, (as the average fall is now only 13.8%) the deposit is still a far bigger barrier to entry for FTB's.
A big enough barrier that most will be locked out of housing.
Deposit is just the top of the iceberg. One can tighten their belt and accumulate 25-40K over a few years if that guaranteed them easier payment terms in future. I did just that - believe me, easy enough with some dedication, and we didn't even have to eat beans out of the can.
Unfortunately, the worst bit starts once you've paid this deposit and embarked on a full-term mortgage. I don't mind living cheap for 3-4 years to build up a decent down payment - but I certainly mind paying £1000 a month for 25 subsequent years - which is what high house prices will entail.0 -
HAMISH_MCTAVISH wrote: »
You seem to have a misguided and overly simplistic view of things. Do you actually believe that money spent on housing is somehow "unproductive"?
This would of course be true if we all lived forever, but perhaps you have heard of this little thing, we call it "death", that ensures constant churn of housing investments......
As FTB's enter the system, so LTB's exit at the other end.
The houses get sold, the money churns back into the economy, and we all start again.
Like your simplistic view. HPI good, HPC bad. All evidence to the contrary is irrelevant.
How about this scenario.
Couple A buy a house from couple B for £200k at 4 times joint income with 100% mortgage.
Couple B buy a house from couple C for £400k with 75% LTV.
Couple C buy a house from dead person D for £600k.
Dead person D's relatives receive £340k after inheritence tax.
Mr A loses his job and couple A get repossessed still owing £200k. House is sold at auction for £140k to dead person D's relatives.
End result:
200k cash in ths economy.
360k of debt, of which only £300k will be repaid.
Rinse and repeat.
Bank collapses, is bailed out by the government with cash that is repaid by spending cuts and higher taxes.
I'd say a great result for the economy.
Of course this is purely fictional and will never happen.0 -
Deposit is just the top of the iceberg. One can tighten their belt and accumulate 25-40K over a few years if that guaranteed them easier payment terms in future. I did just that - believe me, easy enough with some dedication, and we didn't even have to eat beans out of the can.
If you think it's easy to save 40K, you probably make more than most people who would struggle for housing, or do not have the typical persons bills.
40K is almost 3 years ENTIRE take home pay for the type of person that genuinely deserves sympathy about being "priced out". Or more like 10 years if they have to live and pay rent/bills in the meantime.
That is a decade or more of saving for many people. By which time house prices will be well out of reach again.
You're living in La-La Land if you think most FTB's can save 40K in a couple of years.Unfortunately, the worst bit starts once you've paid this deposit and embarked on a full-term mortgage. I don't mind living cheap for 3-4 years to build up a decent down payment - but I certainly mind paying £1000 a month for 25 subsequent years - which is what high house prices will entail.
Seriously, you need to think about the facts a bit more. The original scenario discussed a 25K to 40K deposit on a 100K to 150K house.
The mortgage payments would be closer to £500 a month than £1000 a month.:rolleyes:
But even on your £1000 per month payments, with a 40 K deposit, you're well into 200K house territory..... Which in most parts of the UK is well above the normal FTB requirements.
And of course, with inflation, £1000 a month will seem like peanuts in 10 or 15 years anyway.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Like your simplistic view. HPI good, HPC bad. All evidence to the contrary is irrelevant.
How about this scenario.
Couple A buy a house from couple B for £200k at 4 times joint income with 100% mortgage.
Couple B buy a house from couple C for £400k with 75% LTV.
Couple C buy a house from dead person D for £600k.
Dead person D's relatives receive £340k after inheritence tax.
Mr A loses his job and couple A get repossessed still owing £200k. House is sold at auction for £140k to dead person D's relatives.
End result:
200k cash in ths economy.
360k of debt, of which only £300k will be repaid.
Rinse and repeat.
.
:rotfl:
And you call my posts simplistic.:rolleyes:
Where do you think the tax went? Paying public sector salaries, spending money in the economy, etc....
What about the mortgage interest? Paying interest to savers, to spend in the economy.
You are a seriously deluded person.
A more appropriate scenario is as follows.....
FTB buys a flat for 100K. He pays 100K principal and 75K interest over 25 years.
The 100K principal goes to Mr 2TB, who uses it to buy a semi for 160K, he pays 60K principal, and 35K interest over 25 years.
Mr 2TB dies, and his son sells the house. As he already has a house, he pays off his mortgage, and then spends all the money he would have spent on mortgage payments in the real economy.
Very little is paid in death taxes by the vast majority of people in this country. Around 5% if memory serves, so that is a red herring.
The money paid in interest recirculates around the economy through savers, bank employees, and bank shareholders. The original house capital recirculates back into the economy upon death.
You really need to spend some time outside of HPC..... The bear memes are not accepted as gospel over here on a more balanced wbsite....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
And of course, with inflation, £1000 a month will seem like peanuts in 10 or 15 years anyway.
Wait a minute Hamish, didn't you start a thread today based on an article claiming interest rates would remain a record lows for at least 5 years? Surely this suggests deflation or very low inflation.0 -
Wait a minute Hamish, didn't you start a thread today based on an article claiming interest rates would remain a record lows for at least 5 years? Surely this suggests deflation or very low inflation.
Yes.
But even with inflation at low levels, 15 years makes a lot of difference.
Then theres also career progression. I'd suggest very few people would expect to still be making todays wage in 15 years.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
What is needed is stability. Maybe imposing Capital Gains Tax on residential property would do the trick.
MEWing should be VAT-able.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
Quizzical_Squirrel wrote: »I'm more concerned with getting the market moving again. A stagnant market is awful for most people.
I'm not so much concerned with the level of house prices in general, except for purely personal reasons as when I do sell I will need to get as much as possible so higher prices would benefit me.
I was going to add high prices benefit elderly people who now need to pay for their care and whose pensions have been decimated but having read dreadful attitudes to anyone over 45 on HPC then perhaps I'd better leave this point alone!
Excellent points.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Yes. Need care? Then sell your home.Quizzical_Squirrel wrote: »I was going to add high prices benefit elderly people who now need to pay for their care and whose pensions have been decimated but having read dreadful attitudes to anyone over 45 on HPC then perhaps I'd better leave this point alone!
I think it's called progress.0
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