Mortgage lending up again, rises by 2%

nollag2006

cootambear wrote: »

Surely you aren`t denying theres been a crash (I agree we`re in recovery)?Taking in to account the £ devaluation HP have crashed about 35%, (which is why theyre tempting buyers).

Wow ! I don’t know about you but I, and the majority of folks in the UK, are paid in pounds sterling, so any movement in forex would have limited direct impact on the argument.

:rolleyes:

Taking your argument to its logical conclusion, given that sterling has recovered about 10% from just above parity at the start of the year to the current level, and house prices have also risen about 10% in pounds sterling terms, have house prices risen 20% in actual fact?

:eek::eek::eek:

I only wish that were true, but its somewhat unlikely !! If interest rates continue to remain at such low levels over 2010, which the BOE pronouncements suggest they will, then a 20% appreciation in pounds sterling terms is entirely possible over the next twelve months. I would have thought a figure closer to 15% is more likely though.

bumpoowee

IveSeenTheLight wrote: »

It's interesting you use £80k and £200k.
Are you thinking that house prices should drop 60%:eek:

I picked the £80k figure as that was the average real price when my parents were my age, of course lovely as it would be to see that price again what the price 'should' drop to and what it 'will' (if at all) drop to are two different things. Another 20% down from here is what I think would make more sense/be a more comfortable amount of debt to take on - which would of course be accompanied by higher interest rates because they just don't seem right as they are!

To be fair the £200k figure is a bit off I think I heard that from the rightmove index but the £80k figure is from Nationwide who give current prices at £160k.

IveSeenTheLight wrote: »

Now I concede, interet rate hikes would have a far more devastating effect than previously.
Many managed to cope albeit difficultly with 15% interest rates.
I think far more would go to the wall with 10% rates.
In my opinion, that would affect such a lot of people that we would see pandemonium.

Which is why it is a good idea to get a property for as cheaply as you can and pay off the debt as fast as you can.

My worry about interest rates is partly that if you have a mortgage of £160k and manage to pay off half, and then rates revert back to what they were in the 1980s doesn't that just leave you back where you started - so you've paid off £80k for nothing? Have we got any reason to believe the situation in the 1980s will never repeat itself again?

I would of course agree that it's always a good idea to pay the lowest price and clear the debt ASAP, but this is another point that makes current prices 'unaffordable' in that if the capital of the loan is much higher it will be harder to clear and you will have to pay more to do so. The other thing I forgot about before was saving for the deposit, as the same percentage deposit will be twice what it was in real terms.

Graham_Devon

Well that was an educational thread.

"Houses are affordable". "No they are not". "Are in my area". "But not in mine". "Some people can afford a house". "Others can't afford a house". "5 new buyers this month, they could afford it". "Bull wrong". "Bear wrong".

IveSeenTheLight

Graham_Devon wrote: »

Well that was an educational thread.

"Houses are affordable". "No they are not". "Are in my area". "But not in mine". "Some people can afford a house". "Others can't afford a house". "5 new buyers this month, they could afford it". "Bull wrong". "Bear wrong".

Glad you learned something Graham, discussion and debate can be enlightening

What do we learn from your contribution?

chucky

Dan: wrote: »

God Cleaver, your turning more into Mewbie every day with this s.hite.

Cleaver wrote: »

I actually take that as quite a compliment Dan.

it wasn't meant to be a compliment...

you're not like mewbie - you only have one account :T

Harry_Powell

Graham_Devon wrote: »

Well that was an educational thread.

"Houses are affordable". "No they are not". "Are in my area". "But not in mine". "Some people can afford a house". "Others can't afford a house". "5 new buyers this month, they could afford it". "Bull wrong". "Bear wrong".

A bit of an obvious lead into another argument Graham, you're usually much more subtle than this. Come one mate, you can do so much better, get this thread ruined!!

Graham_Devon

IveSeenTheLight wrote: »

What do we learn from your contribution?

Nothing. I posted it especially for Harry.

Graham_Devon

LOL.

Well that didn't take long! Hey Harry

MiserlyMartin

bumpoowee wrote: »

The issue seems to be risk - holding £200k of mortgage debt is much more risky than holding £80k of mortgage debt as you are more vulnerable to a number of factors, eg interest rates (and theres only one way they can go), falling house prices. The level of risk in taking on a mortgage for an average house as a FTB from where we are now seems far higher than it would have been back when houses were £80k in real terms.

This exactly why I haven't bought. To buy an asset valued today at over 200K regardless of it if is cash or mortgage is too risky in these times I feel. Even more so if you have to borrow the money.

MiserlyMartin

chucky wrote: »

and there's me thinking that all FTBers were totally priced out of the market... pffffff that's another HPC.co.uk myth out of the window :T

CML figures class anyone who is entering the market without a property to sell as a FTB, therefore this can include anyone who is renting currently having owned before. Also you forget about the many keyworker, and shared ownership purchases which are all many FTBs can scrape to afford at these prices.