Homeowners are in for a drop in prices in next year’s first half

IveSeenTheLight

Really2 wrote: »

To my idea of things to be "cash rich" I would say you would have to be 50% or more.

If you do not have more money than you need to borrow I would not class that as "cash rich"

But that's just how I think if you need to owe more than you own you are not cash rich in terms of buying.

Being a little pedantic here, but.....
even if you had a 75% deposit and only needed to borrow 25%, once you hand over the deposit your not cash rich are you.
You'd still be in debt for 25% of the purchase price of the property

I've built up quite a bit of savings at the moment, but am preparing to sinc it into my mortgages at the end of the year.
So while I have quite a bit of cash available, I would not say I was cash rich.

Gotta balance up the books

Really2

Yakubu22 wrote: »

Some bulls use the whole supply and demand argument as a reason for why prices must go up.
What I dont understand is IF there is such demand why are contruction/building/supplier companies going out of business all over the place. Why are they no longer building and keeping afloat - if there is such demand for extra housing?

TBH, All the builder near us have been building since march onwards. They are building on order basis but I have seen a fair few houses go up this year (over 20) Their was nothing from August to march last year though)

They blew apart thier balance sheet by down valuing land to sell cheaper.

But it would be suicied now to build up stockpiles of houses as it would much for the reason you stated above. Over supply decreases demand.

Graham_Devon

chucky wrote: »

i still can't see why you think people with cash rich deposits are supporting prices.

It's part of the article we are talking about on this thread.

It's also what Ernest & Young are saying.

IveSeenTheLight

Yakubu22 wrote: »

Some bulls use the whole supply and demand argument as a reason for why prices must go up.

No, most say the supply and demand set the market rate.

Yakubu22 wrote: »

What I dont understand is IF there is such demand why are contruction/building/supplier companies going out of business all over the place. Why are they no longer building and keeping afloat - if there is such demand for extra housing?

But we know demand is down. The figures for sales tells us that.

The thing about building companies is also that they temper the supply to try and maximise profits. No point in flooding the market with supply as that would just cause the price to drop. Not good for the businesses

Really2

IveSeenTheLight wrote: »

Being a little pedantic here, but.....
even if you had a 75% deposit and only needed to borrow 25%, once you hand over the deposit your not cash rich are you.
You'd still be in debt for 25% of the purchase price of the property

True but you automatically go to Asset rich and if need be could raise funds quickly from your cash input to the purchase.

Bufger

I'm just in the process of buying my first house and i know there are plenty more of us out there! (seems to be loads of first time buyers as far as i can see). I bought a big and manageable enough house to live there for a number of years so negative equity shouldnt be a problem short term.

btw 10% isnt so hard to save if you can be tight for a year or 2! it takes a while but you have to plan these kinds of things ;-)

Gloomy people on here eh!

chucky

Graham_Devon wrote: »

It's part of the article we are talking about on this thread.

It's also what Ernest & Young are saying.

what's their definition of cash rich?

System

Ernest & Young

Graham_Devon

chucky wrote: »

what's their definition of cash rich?

Dunno. Don't care tbh.

What i can guarentee is you will say their definition is wrong

IveSeenTheLight

Graham_Devon wrote: »

Dunno. Don't care tbh.

What i can guarentee is you will say their definition is wrong

You make a point about using their "cash rich" reason and then follow it up by saying you don't care