Risk

lemonjelly

breadlinebetty wrote: »

Lemonjelly,

It doesn't matter that the government only pay the interest on a mortgage if a person loses their job - the property will ALWAYS rise in value eventually - and if the person decided to sell in 10 years time the property would be worth at least 2 or 3 times what it is today. So, not only would they pay the the capital off - they'd have a 200/300% PROFIT on top!

What profit do you get back when you move out of rented? Not one bean!

And it's rubbish to say you won't affect your credit rating by getting into rent arrears - if you're taken to court over unpaid rent that will go on your credit report! A judgement can be made against you for the outstanding debt.

And what?
Support will only meet the interest payments. Whilst unemployed, you have to meet the capital repayments. Realistically, on JSA it ain't gonna happen is it?

Can you imagine walking into the bank & speaking with the manager:

"yeah, I know I'm 4 months in arrears now, lost me job innit. It's ok though, cos prices always rise & I'll sell it in 10 years for a massive profit, so it's all good. Now if you can just hang on til then, & I'll pays ya back!"

You really think a bank will swallow that?

Take the point about a small claims record for rent arrears, however a mortgage repossession would have a much bigger effect on your credit rating than a CCJ.

:rolleyes:

macaque_2

Thermidor wrote: »

And why would he want to buy 3 properties if they're such a bad investment?

This post of yours should be made into a sticky on the Joke thread! It's utterly insane! You cannot be serious! Are you seriously saying that in 25 years time a property worth £250know will only fetch £150k??? Sounds like your calculator's playing up! Twenty five years ago you could have picked up a place now worth £500k for £50k! And savings, investments, shares etc are no guarantee of growth! You only have to look at how much people have lost on their savings now to see that!
I think you need to go and complain to your primary school teacher for not teaching you the basics.

Because we have had a remarkable bull run in property for several generations, many like yourself have started to confuse trends with laws. Because house prices enjoyed long term growth in the past does not mean that will do so in the future. There are so many vested interests linked to high property prices however (not least the government) that suggestion of long term falls tend to get shouted down.

The price of anything can go down as well as up. Thirty years ago silver was more expensive (in terms of $) than it is today. There is nothing unusual about property prices dropping (in real terms) for decades. Such phenomena have been seen very recently in Germany and Japan.

The property bubble generated countless £billions in extra taxes and made many rich from doing nothing. The fallout from this however is that the UK is economically weaker and the country is a less appealing place to live. Incomes are going down, unemployment and taxes are going up and good graduates are moving abroad. Even the East Europeans are heading for the airports as the UK increasingly becomes the sick man of Europe.

I think you have to acknowledge that factors (low unemployment, rising incomes, rising confidence, lower taxes, rising population) that drove house prices to their current dizzy levels are now facing the wrong way.

Will a £250k house sell for £150k in 25 years time? I don't know, it could be more or it could be less. What I know for certain however is that those who still believe it is 'business as usual' for the housing market are in for a rude shock.

silvercar

lemonjelly wrote: »

And what?
Support will only meet the interest payments. Whilst unemployed, you have to meet the capital repayments. Realistically, on JSA it ain't gonna happen is it?

Can you imagine walking into the bank & speaking with the manager:

"yeah, I know I'm 4 months in arrears now, lost me job innit. It's ok though, cos prices always rise & I'll sell it in 10 years for a massive profit, so it's all good. Now if you can just hang on til then, & I'll pays ya back!"

You really think a bank will swallow that?

Take the point about a small claims record for rent arrears, however a mortgage repossession would have a much bigger effect on your credit rating than a CCJ.

:rolleyes:

Haven't you heard of interest only mortgages?

lemonjelly

Yes. Personally I'm not convinced they're a good product.
Doesn't explain how someone with no/a very small income makes the capital repayments on the original borrowing though. Or gets the mortgage in the first place?