The property boom is well underway now.

Harry_Powell

HammerSmashedFace wrote: »

I think if you look back at my posts 12 months ago, you will find that I was forecasting the ending of illusion economics within 24 months, as I was pretty sure that Labour would hang on to the death, which is what has happened.

You haven't been here 12 months! You only joined in September last year!

HammerSmashedFace

Harry_Powell wrote: »

You haven't been here 12 months! You only joined in September last year!

Behave....:D

stueyhants

SingleSue wrote: »

I actually agree with you on this (shock, horror!)...back in the mid 90's, we could see no way that prices could ever get back to what they had been, yet not even a decade down the line and prices had not only got back to where they had been but tripled (or more) in some cases.

Our house sold for £29k ish in 1997...in 2007 they were going for over £100k.

The market will recover in time, the old bad ways will creep in again, slowly at first and before we know it, it is 2030 and prices will be astronomical compared to today.

Prices have gone past their previous peaks for two main reasons.

1) Interest rates over the last few decades have on average got lower.
2) The number of two income households has increased.

Whilst these two factors can remain in the short and long term and keep prices where they are. However I'm struggling to see what the next factor which allows the prices to move up is going to come from.

IR rates can't really go much lower. Once you have two household incomes supporting a mortgage how do you increase on that ?

I can see shared equity possibly having some impact but I don't think it will be on the scale needed to move the whole market up to the next level.

Really2

Graham_Devon wrote: »

I'd expect you to be different Really.

Are you suggesting that the normal use for a IO mortgage over the last decade has been by switched on financial wizz's working out how to manage their own mortgages with overpayments etc?

Are you really suggesting this?

I did use the word "usually" in my sentence. That in general means that most of the time it's been used because people cannot afford any other way. It does not mean I am talking about every single person.

I think usualy they are used to be flexible and overpay when rates or earning are low and underpay when higher.

The minority would be for mortgaging to the hilt and lieing about your income.
It seems site law to think what the minority did is actually the norm. Well sorry I don't believe it is and non of you ar providing any proof to show me otherwise.
Like I said can you actually borrow more on a "usual" (high street bank just like the people who do repayment) mortgage just because you are IO?
2 Responses so far seem to have ignored that.

Really2

Thrugelmir wrote: »

Mine isn't and I didn't get the option of interest only back in 2007. A repayment vehicle was a necessity.

Who is your lender I am FD and you have to set up repayment if that is your chosen method of debt repayment?

Thrugelmir

Really2 wrote: »

Who is your lender I am FD and you have to set up repayment if that is your chosen method of debt repayment?

Hinckley & Rugby BS

Really2

Thrugelmir wrote: »

Hinckley & Rugby BS

Oh, OK I think perhaps it is only the major lenders that it as IO as standard.

Thrugelmir

Harry_Powell wrote: »

I'm 25 and will see plenty of house price corrections over my period of home ownership (hopefully 60 years), this doesn't deter me from buying a home nor does it make me believe that there wont also be periods of boom within that 60 year period.

At 25, you are basing your view on a limited time frame. You will witness more than a correction in the medium term, in many respects a fundamental rebasing of house prices.

Thrugelmir

Really2 wrote: »

Oh, OK I think perhaps it is only the major lenders that it as IO as standard.

A lender that offered good products but never took excessive risk.

Thrugelmir

stueyhants wrote: »

Prices have gone past their previous peaks for two main reasons.

1) Interest rates over the last few decades have on average got lower.
2) The number of two income households has increased.

Whilst these two factors can remain in the short and long term and keep prices where they are. However I'm struggling to see what the next factor which allows the prices to move up is going to come from.

IR rates can't really go much lower. Once you have two household incomes supporting a mortgage how do you increase on that ?

I can see shared equity possibly having some impact but I don't think it will be on the scale needed to move the whole market up to the next level.

You've omitted high lending multiples, unverified income lending and freely available money to borrow in the past decade from your list.