The “crash” is over – now how long before prices fully recover?

b0rker

carolt wrote: »

What could you buy in 2007 for 105K?

Is that something to be 'smug' about?

I doubt there are many people on here who couldn't have afforded 105K two years ago, but most of us didn't fancy living in a shed.

Wow.

Why do you assume that everybody lives in your town/city?

In Inverness £105,000 can go a fairly long way. It could go even further in Feb this year before you missed the boat. I have to assume you have missed the boat as I cannot think of anything else that would make you so bloody miserable all the time.

Anyway the figures are to a degree irrelevant to the point I was making which was that the wealth that owning a home can bring is not just about equity from HPI. I am now saving a large amount on what it would cost me to rent the same property. I can either save that money or put it towards paying the mortgage down further making future monthly mortgage payments even less.

As I say I am not sure why people are so fixated with equity above the initial price paid for a home. With the interest I can earn on any savings at the moment being so very poor it makes sense to pay down the mortgage making my repayments considerably less than renting.

Current repayment: £420 on £78K @ 4.78% over 28 years
Rental on same property: £550

Will probably pay down another £8K in early 2010 so then:

2010 repayment: £380 on £70K @ 4.78% over 28 years

A saving of £480 over a year. Then add on the saving of not paying someone else's rent and the repayment part of the £380 monthly payment and I am saving £££.

Or I could save that £8K for a year in a IF ISA at 3% and earn £250...

I can only imagine the joy of being on a tracker right now and have considered paying the fee to buy one.

Seriously. Now is a great time to own a property. Is that why you are so angry Carol? You know this don't you...

b0rker

I don't need HPI to create equity for me.

I am creating it myself by paying down the mortgage with the money I can save and by doing so I am able to save even more money because my monthly mortgage payments are reducing. It is a never ending circle of happiness...

Is this possible when renting?

I cannot imagine that the cost to rent this house will be down to £380 in early 2010. In fact I imagine the cost to rent it would be £550...

It would probably still cost £550 to rent this house in 2012. By which time I will have paid this place down to say £50K. Hopefully get on a 5 year fixed at roughly 5% some point before rates go up.

2012 repayment: £285 on £50K @ 5% over 26 years
Rental on same property: £550

Nice!

b0rker

I know the doom mongers will come on and shout about how much equity I am certain to lose when house prices plummet in the next 6 months or so. But what happens when that does not happen my doom monger friends? I will be sitting pretty and you will still be here shouting:

The End Is Nigh

Ad infinitum.

carolt

Never ever ever

Those of you wondering about nollag's track record on making predictions about the housing market, and wondering whether he has a clue what he is talking about, may find this interesting:

http://forums.moneysavingexpert.com/...&postcount=411

Quote:
Originally Posted by nollag2006
You're being very charitable Jason. These House Price Crash muppets have been peddling their nonsense for at least 5 years now, and show no sign of accepting reality, that while house prices may slow for a while in certain areas, they are just not going to drop.


Date? 13/11/2007 - ie just at the start of the 20% drop in house prices over the next year.

:rotfl::rotfl::rotfl:

WHAT AN IDIOT!!

carolt

Never ever ever

b0rker wrote: »

Is that why you are so angry Carol? You know this don't you...

No, I'm angry because some low-life on the internet has publicly accused me of being a racist.

I would have thought that was clear.

chucky

Some time after 2011

Thrugelmir wrote: »

The extreme posters soon disappear when they are unable to crow anymore. If you read their posts carefully you soon realise that its hot air, as they have no idea what their talking about.

that's right there was !!!!!!, Brit has stopped posting threads and many more extreme posters who had their sad little fan club...

domtak

Probably by the end of 2011

My take on the situation is this, house prices in 2007 were very much out of the reach of most FTBers without significant deposits. In fact, house prices since 2001 have skyrocketed out of most peoples reach when compared with increase in earnings / cost of living.

So how are we expected to go back to these prices and beyond? No one would be able to buy (unless they borrowed a lot of money... which was the problem this time round).

I'm on the precipice of buying and can't really decide what to do. Half of me thinks I should just sit tight and keep saving and see how things pan out. The other half of me would like to buy but I can't accept the amount I'd have to commit to pay to get myself a place.

It's a tough situation for sure.

D

carolt

Never ever ever

The crash is not over..the OP who wrote this is up to his neck in negative equity - he was one of the fools who bought at the peak - hence his desperate, overwhelming desire to talk up the market.

Buy now if you want to, and you can afford a reasonably long-term fxed rate, and you're fairly confident re job security. Don't buy if any of those don't apply, or you're buying somewhere that would not suit your needs for the next 5 years at least, pref more - property is not a liquid asset should your circumstances change.

So eg don't buy a small flat if you're hoping to have chidren in the next 5 years (or 10 years, preferably). Unless it has lots of room to expend or your salary is guaranteed to increase.

Good luck.

new_home_owner_3

Might be a bit up and down, but should be back by the end of 2010

nollag you made some cracking posts back in 2007 lol, we have had a bit of a crash , but you was saying back in 2007 we wasnt going to have one.

I would say we have had a bit of a crash by where we live but prices havent really fell that much, having said that different areas in the uk have had bigger falls.

A lot of houses by me are now selling but until the price come up on the land registry i wont know what the owners accepted.

HAMISH_MCTAVISH

Probably by the end of 2011

carolt wrote: »

The crash is not over..

Define over....

The absolute trough was reached back in February 2009. Prices may well dip slightly again over winter, but the chances of them breaching that low are vanishingly small.

Year on year positives are happening now, and will continue to expand. The majority of areas will be YoY positive by years end.

The crash is over.

Any further dips are falls within a growth trend, as these rises have now gone too far to be growth within a declining trend.

the OP who wrote this is up to his neck in negative equity - he was one of the fools who bought at the peak - hence his desperate, overwhelming desire to talk up the market.

The OP may well be in NE, but not everyone who bought in 2007 is in negative equity. Some have gained substantially.

Buy now if you want to, and you can afford a reasonably long-term fixed rate, and you're fairly confident re job security. Don't buy if any of those don't apply, or you're buying somewhere that would not suit your needs for the next 5 years at least, pref more - property is not a liquid asset should your circumstances change.

Can't really disagree with any of that.

Although taking a fixed rate just now would be a costly error in my opinion, with rates now projected to stay below 2% until 2014.