Stealing from your children

Really2

DaddyBear wrote: »

Not if it's eating into your equity.

But if you are trading up it is eating in to someone else's more.

20% fall

£100K (own) down £20K to £80K

Trade up
£200K Down £40K To £160K

Overall £20K better of than static or £20K more to spend on upsizing.

Best would to sell your own for nearer peak and get an even bigger discount on the one you are upsizing to.;)
Bargaining power is also greater in a falling market.

System

equity = free deposit though.

DaddyBear

Joeskeppi wrote: »

equity = free deposit though.

Exactly my point. With the current Market, less than 10% means you can't get a mortgage, less than 20% and the rates are prohibitive. It's true that in a falling Market the difference between the value of houses Is less, but if you have Insufficient deposit it's irrelevant.

Really2

DaddyBear wrote: »

but if you have Insufficient deposit it's irrelevant.

Perhaps but if you are currently an owner (who has benefited from HPI) a falling market is the best to catch.

But for a non owner (deposit) it makes little difference, just the bargaining power a falling market gives you.

I am glad I traded in a falling market, sold my old house for only £5K below peak valuation (but still sold it for by far the highest for the road)

And purchased at 27% below peak.

If I had waited for stability I would be looking at my previous house being worth less and my current the same or more.:eek:

Stable prices come after a crash usually so you would have hemorrhaged your equity if you were an owner buying in a stable market. But you would have less risk perhaps.

Running_Horse

You know what? The sun is shining outside. I'm going for a walk.

http://en.wikipedia.org/wiki/Ad_nauseam

Yakubu22

IveSeenTheLight wrote: »

I'm entirely happy for properties to rise in line with inflation.

Then we are agreed.

DaddyBear wrote: »

Exactly my point. With the current Market, less than 10% means you can't get a mortgage, less than 20% and the rates are prohibitive. It's true that in a falling Market the difference between the value of houses Is less, but if you have Insufficient deposit it's irrelevant.

This is the crux of the argument IMO. No-one wants a return of 105% mortgage or anything close. But it's damn hard to save up a 25% deposit these days-just to win yourself a reasonable interest rate.

Really2 wrote: »

I am glad I traded in a falling market, sold my old house for only £5K below peak valuation (but still sold it for by far the highest for the road)

Yep it seems you did well. And I applaud your manouvering in those circumstances. :beer:

IveSeenTheLight

Yakubu22 wrote: »

This is the crux of the argument IMO. No-one wants a return of 105% mortgage or anything close. But it's damn hard to save up a 25% deposit these days-just to win yourself a reasonable interest rate.

So what do you do?

Would it not seem reasonable to be better of to purchase a property at the higher rates, then in a few years time when due to re-mortgage, you have benefitted from the paying off of the capitol and the increase in property (in line with inflation).

Roughly as an example, if the property rises 3% per year and you pay off 8% of the capital in three years (calculated using http://www.calculator.net/mortgage-calculator-uk.html), then your essentially 18% equity better off

DaddyBear

Really2 wrote: »

Perhaps but if you are currently an owner (who has benefited from HPI) a falling market is the best to catch.

But for a non owner (deposit) it makes little difference, just the bargaining power a falling market gives you.

I am glad I traded in a falling market, sold my old house for only £5K below peak valuation (but still sold it for by far the highest for the road)

And purchased at 27% below peak.

If I had waited for stability I would be looking at my previous house being worth less and my current the same or more.:eek:

Stable prices come after a crash usually so you would have hemorrhaged your equity if you were an owner buying in a stable market. But you would have less risk perhaps.

Good points. I was think from my own point of view. As someone who hasn't benefited from HPI, stagnation is the ideal.

silvercar

Yakubu22 wrote: »

Plus you really think I'd let my pride get in the way of a major financial decision? My pride can go to hell if it meant a lifetime of security. I simply believe in the short term, prices will stagnate at best. So unless i need to buy, I probably won't.

This is all possibly true, though the "need" to buy is subjective, problem is that you need to live somewhere, so the other half of the "should I buy" question is the costs of renting.

FATBALLZ

IveSeenTheLight wrote: »

To put it simply, if I want to buy a house and find it unnafordable, do I: -

a) Moan and complain on a forum that house prices must lower
b) Consider my position and how I can improve my affordabiliy to meet the market requirement
c) Decide to wait and hope that the house I want come down to my affordability, whilst also invoking a)
d) consider my position and lower my expectations in order to achieve my goal albeit at a lower more realistic level given the market conditions, possibly requireing to move to an alternative area to suit my financial conditions.
...
I just don't understand it.

Perhaps because you didn't consider that it's possible to lower your expectations, increase your affordability and express dismay with the excessive cost of housing concurrently.