The property boom is well underway now.

lemonjelly

Davesnave wrote: »

Err...continued upward pressure on food, water and sources of energy mainly, coupled with millions more people in other parts of the world wanting a larger slice of the action. Put this against a backdrop of climate change, and there is more sense in believing that the future will not be like the recent past than in imagining it will soon be 'business as usual' within UK Plc.

Not to mention the upward spiral of fuel costs, leading to most goods being more expensive (contrasted with frozen/reduced wages, & reduced disposable income following tax increases).

Emy1501 wrote: »

What happens if we do not get the growth predicted in the next few years? The government has not explained how it will halve the debt in 4 years and we know the PIIGS are not in a great state. Few are predicting growth as the government is predicting.

Harry_Powell wrote: »

Then we'll have stagnation, but the world will continue to rotate and we'll all just get on with our lives. 1M British men were killed in the Great War and yet life went on, compared with that catastrophe anything that happens today is small beer.

You can't put your life on hold and live in fear because a few Chickin' littles are running around hysterically announcing that the sky is going to fall in.

Will we? Or will we have zero growth combined with rising national debt? here is a belief that consumer spending will motivate growth to project the economy out of these difficult times. I really don't see that happening, do you?

Emy1501

Harry_Powell wrote: »

Then we'll have stagnation, but the world will continue to rotate and we'll all just get on with our lives. 1M British men were killed in the Great War and yet life went on, compared with that catastrophe anything that happens today is small beer.

You can't put your life on hold and live in fear because a few Chickin' littles are running around hysterically announcing that the sky is going to fall in.

Of course. Few people are predicting the world will end as we know it. But why buy now when in my opinion prices could be as much as 25% lower in 12-18 months. Of course if you dont agree or are noth bothered prices may fall then of curse you should not be bothered and get out and buy.

Harry_Powell

Too many responses to answer everyone fully, so apologies in advance..

I don't think that I 'know it all', just as I don't think that age always endows wisdom. All I stated was that in comparison with other historical events that the UK/Europe/world has gone through and survived, the current trials and tribulations are quite minor and that life will find a way.

Sorry if my optimisim clashes with other people's rather pessimistic viewpoints, but I'm a glass half-full type of person. I plan for what I believe is a realistic worst case scenario (not global economic collapse, but my own personal economic collapse - i.e. job loss or illness) via combinations of savings and insurance and then I get on with enjoying my life.

I'm not sure where the BTL comment came from as we're talking here about buying our own homes via interest only mortgages, not BTLs or investment properties.

Generali

Harry_Powell wrote: »

You can't put your life on hold and live in fear because a few Chickin' littles are running around hysterically announcing that the sky is going to fall in.

Perfectly true.

If the UK's economy is stuffed (and I think there is a chance that it is, although it's more likely that things will be quite unpleasant for a number of years) then you're likely to have a bad time of things regardless of whether or not you buy a house now.

Harry_Powell

Generali wrote: »

Perfectly true.

If the UK's economy is stuffed (and I think there is a chance that it is, although it's more likely that things will be quite unpleasant for a number of years) then you're likely to have a bad time of things regardless of whether or not you buy a house now.

Or just as likely to have a good time of things regardless of whether or not you buy a house now.

treliac

lemonjelly wrote: »

Will we? Or will we have zero growth combined with rising national debt? here is a belief that consumer spending will motivate growth to project the economy out of these difficult times. I really don't see that happening, do you?

No.... Real consumer spending requires that people have jobs, confidence about their future and money in their pockets - that they have paid back credit cards and any other unsecured debts accrued.

This will take a real shift in thinking, facing reality and is a correction that's not going to happen in a hurry.

It would be nice to think that the thrifty of the past will be able to enjoy the fruits of not having been sucked into unsustainable debt, even though they too will have to pay for the profligacy of others.

kabayiri

Davesnave wrote: »

I don't want to be branded as hysterical, just someone who thinks it might be better to plan for a different future. On a practical level, that might mean becoming involved in British food production or installing photovoltaic cells on the roof.

That's hardly living in fear, but it might be more use than putting cash into BTL.

In a similar vein, I was hoping that the recession would at least provide a wake up call to 'credit-obsessed-Britain'.

Large amounts of personal debt can really hinder quality of life when circumstances change.

However, it does sound from Conrads' clients that these people really do seek a return to a pre-2008 world.

I'm not surprised though. The government can't preach personal financial sobriety when it is unable to demonstrate this on a state level.

ukcarper

Thrugelmir wrote: »

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.

So where do you think house prices will end up

stueyhants

Thrugelmir wrote: »

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

I agree, but these factors only work if the borrower has the ability to pay the money back.

If we deregulate the mortgage market and allow any income multiple you still reach a point at which the borrower can't afford the loan.

Lower IR and more incomes supporting each mortgage allowed the amounts borrowed to increase over the last few decades.

Going forward, without an increase in income or reduction in debt servicing costs, house prices will just tread water.

Shared equity could become mainstream in the future but even that has limit to how much it can push up house prices. All new FTB having IO loans would also push up prices but again it's limited and once prices go up a bit futher and interest only payments get too high, then what.

Davesnave

Harry_Powell wrote: »

I'm not sure where the BTL comment came from as we're talking here about buying our own homes via interest only mortgages, not BTLs or investment properties.

Sorry, that was me thinking around the doomsday idea which you introduced with the word armageddon.

Given that some of us own our homes, there is the question of where to invest. I'd argue that improving energy efficiency or buying farm land could be more sensible responses to changing world conditions than picking up a BTL, which people 'traditionally' did, that 's all.

I'm a glass half-full person too.