The property boom is well underway now.

Graham_Devon

Really2 wrote: »

TBF if you paid the same IO as you did repayment there is no actual difference, you still have to service the debt the same.
Just that one the debt is slightly decreasing over time.

Oh shutup really.

I'd have to pay a big chunk at year 25 you fool.

No difference....course.

ruggedtoast

I viewed a house the other week. The agent breathlessly informed me that it was going to be on for £240 but the bloke would take just £220 and it was all perfectly decorated.

We went along and its basically a 1960s place with original almost everything, half scraped off wallpaper, and yellowed original wiring and brickwork that longs for repointing.

Theyve spent about £5k on an Ikea kitchen and bathroom. Also they've thoughtfully walled in the water tank and then plumbed the toilet in right in front of it.

At some point some numpty has knocked out a supporting wall in the middle of the house, which is now visibly subsiding.

It also overlooks an industrial estate.

He bought it for £170k last year, and as far as I can see the vendor saw him coming. And in 12 months he's expecting £45k clear profit.

Who knows, maybe he'll get it.

The area we were looking in, in the 3 months we were looking probably saw asking prices go up by 15%. There were two bed properties coming on in streets with unsold 3 beds for £20k more than those unsold 3 beds.

As an FTB I'd like to think its all froth and nonsense and will blow over.

But I'm beginning to think that no one ever lost money by underestimating British people's stupidity when it comes to property, or by overestimating how much debt they'll take on to buy it.

Really2

Graham_Devon wrote: »

Oh shutup really.

I'd have to pay a big chunk at year 25 you fool.

No difference....course.

Can you read?

Really2 wrote: »

.
Just that one the debt is slightly decreasing over time.

Sorry for being logical in debate again GD. My point was obvious, you still pay the same out each month. You were making out the IO person would be struggling more than you and more dependent on a job.

Thrugelmir

chucky wrote: »

oh dear... unless you have a good deposit it seems that there's going to be some disappointed people that are hoping to buy :eek:

Read the CML report. Average deposits have risen considerably.

smartn

Conrad wrote: »

Thats a very dated outlook.

I have I/O as does my charterred accountant. We know exactly what we're doing.

Allowing a lender to be in charge of your capital repyment schedule is for the real numpties.
Most clients here expect chunky inheritance - ok it might not come off - it's only an added cherry but worth mentioning.

Also you overlook the fact a lot of people have more than one property so the I/O route is perfectly suitable.

We need to forget the past pension and c&i model - totaly outdated now for many of us. Vince Cable will perhaps cotton onto this one day;)

Your comments truly shock me. It looks like many in the industry have learnt nothing from the last two years.

Harry_Powell

Really2 wrote: »

TBF if you paid the same IO as you did repayment there is no actual difference, you still have to service the debt the same.
Just that one the debt is slightly decreasing over time.

Exactly.

Whether the bears like it or not, over the 40 years of home ownership property will increase. Those of us who are young now and only just getting on the ladder might look back and sigh at the huge gains made by the previous generation, but surely at the start of their housing journey the previous generation looked back at the one before and sighed?

Thrugelmir

Really2 wrote: »

I thought the average age has dropped 4-5 years in the last 3 years? (currently somewhere between 27 and 30 depending on where you live)

Courtesy of the CML from their 2010 budget submission.

14. Prospective homeowners will require a substantial deposit which will impact on the age at which future first time buyers will enter the market (unless they have parental support) – the average FTB age has increased from around 33 to over 36 in 4 years.

21. Interestingly, one of the conclusions at the CML event, which echoes the findings of the latest government commissioned [FONT=Arial,Arial][FONT=Arial,Arial]English Housing Survey[/FONT][/FONT], is that there will be a trend down in the percentage of home ownership, with a move towards increased private renting for a variety of lifestyle choice and financial reasons by prospective home owners.

Graham_Devon

Really2 wrote: »

Can you read?


Sorry for being logical in debate again GD. My point was obvious, you still pay the same out each month. You were making out the IO person would be struggling more than you and more dependent on a job.

It's a collosal difference!!!

What if I don't want to move? I have my interest only mortgage at year 25, and owe £130k for the house.

The house may now be worth £500k.

But to pay for the house, I have to sell it.

No thanks! HUGE differences.

chucky

Thrugelmir wrote: »

Read the CML report. Average deposits have risen considerably.

exactly the point - the funny thing is which most bearish people miss/missed completely was that house prices dropping doesn't mean that more people will be able to buy property. it's the opposite in fact.

Harry_Powell

Graham_Devon wrote: »

Oh shutup really.

I'd have to pay a big chunk at year 25 you fool.

No difference....course.

I think you missed the point graham. You don't pay off the 5 bed home at year 25, you don't need the 5 bed home any more because the kids have left home. You downsize and buy a smaller home outright with the HPI gains you made over the 25 years (or 30 or 40 years before retirement).