Most are Priced out, will it ever change?

chucky

chucknorris wrote: »

I think you posted something a while ago which was that in the future 'shared equity' might become much more common as the first step of property ownership, that may well become true.

i don't see the "housing ladder" changing.

banks collapsing, credit being squeezed very tightly and large numbers of people being made unemployed haven't exactly made those 30% falls.

additional rungs have to be added to allow buyers to get onto it. shared ownership may have to be the solution.

the_ash_and_the_oak

chucky wrote: »

additional rungs have to be added to allow buyers to get onto it. shared ownership may have to be the solution.

do you see additional rungs as implying more stages of home ownership - more moves during each persons homeowning

chucky

the_ash_and_the_oak wrote: »

then we're not saying "its always been this hard and it won't change" - we're actually saying "no - it used to be harder than this, it already has changed, and now more people are able to do it than in the past" (excepting this current period where it got a bit harder again - but in general)

it's always been hard - there are times when it's easier and times when it is much harder to buy. it's cyclical.

the_ash_and_the_oak

chucky wrote: »

it's always been hard - there are times when it's easier and times when it is much harder to buy. it's cyclical.

this is true but it seems that gradually (with the exceptions of a few blips - early 90s? - 2008/2009) a larger section of the population has been able to buy - shown by the fact that pretty much each year a greater proportion of the population own?

This suggests that the periods where it gets harder to buy again have actually been quite short periods. I'm wondering whether (after this current period? how long is this current period I don't know) - will it continue to get easier, or will it get harder again for a longer period of time?

chucknorris

the_ash_and_the_oak wrote: »

do you see additional rungs as implying more stages of home ownership - more moves during each persons homeowning

It could actually also mean less moves, for example starting out by buying a share in a house and over time increasing that share, rather than buying a flat then later buying a house.

ThrowingStonesAtYou

chucky wrote: »

usually when people can buy property when it is 'cheaper', lending is not cheap or is not available.
when house prices are increasing is when lending is easier to get and is cheaper...

Which means that if you take a high interest rate mortgage when prices are lower, and rates drop, you are in the money.

And if you take a low interest rate mortgage when prices are higher (such as now), and rates rise, you are screwed.

chucky

the_ash_and_the_oak wrote: »

do you see additional rungs as implying more stages of home ownership - more moves during each persons homeowning

maybe - but i think the frequency of people moving in the last few years has been increased by the credit availability and portability of these lending products. something that had never really been available.

chucky

ThrowingStonesAtYou wrote: »

Which means that if you take a high interest rate mortgage when prices are lower, and rates drop, you are in the money.

And if you take a low interest rate mortgage when prices are higher (such as now), and rates rise, you are screwed.

that would imply that anyone who bought from 2000/2001 would be screwed too - i don't think so.

the_ash_and_the_oak

chucknorris wrote: »

It could actually also mean less moves, for example starting out by buying a share in a house and over time increasing that share, rather than buying a flat then later buying a house.

now this is an interesting point. but what would this mean for owners of flats wishing to trade up?

ThrowingStonesAtYou

chucky wrote: »

that would imply that anyone who bought from 2000/2001 would be screwed too - i don't think so.

I was over simplifying, it is an issue of risk, risk has been very low in the past but is very high now. If you buy now and rates stay low then you should be ok, however if they rise shortly after you take out a mortgage, you are going to be screwed unless you took out a small mortgage relative to your earnings (which lets face it, a lot of people don't).

People who bought in 2000/1 have had rates say low and prices were a fair bit lower at the time so unless they've borrowed against their equity in a stupid fashion they are in a low risk situation now.