The bear case

Yakubu22

chucky wrote: »

when house prices are low, finance is more expensive and difficult to get.

Are house prices low currently? I'd argue they are lower than in 2007 but not "low". When combined with expensive finance it makes tough times for a lot of people.

chucky

Yakubu22 wrote: »

Are house prices low currently? I'd argue they are lower than in 2007 but not "low". When combined with expensive finance it makes tough times for a lot of people.

true - my interpretation was from the end of the cycle (2007).

everytime we have reached a peak in a house price cycle and they've dropped - my quoted theory seems to apply.

Emy1501

pop_gun wrote: »

would you lend to someone who had no deposit and a dodgy credit rating?

No and thats why the market is likely to struggle over the next few years.

Emy1501

chucky wrote: »

that's the new reality, get a good deposit together then buy - the other option is going back to 95% mortgages for everyone who applied.

it's ironic that the same people that complain about lax lending are the ones that are complaining now that deposit level are too high.

Who is complaining about deposits being too high?

IveSeenTheLight

Chaos_A.D. wrote: »

I still think that tools could be used over a period of time to weed out parasites in the BTL market by slowly increasing CGT to 90% on second homes, this would lower the price slowly and not cause a crash. The problem with that many of the 'lawmakers' have their head in this trough.

Certainly CGT at 90% would affect the BTL business model.
Not in rental terms but the risk associated with the procurement of the assett.

So you get a reduction in BTL properties, increasing the supply of those who wish to buy, but what about people who choose to rent.
With social housing having declined, what options do renters have.

You've looked at this from one angle, however you need to take into consideration the other people at the table.

A better solution is to increase the supply.
They cannot do it themselves due to the funding requirement, thus they would need to change the planning requirements.
It's not a quick fix, but cetainly with more foundations.

IveSeenTheLight

RenovationMan wrote: »

What a lot of time and effort that you guys put into talking about house prices. I've been lurking and occasionally posting in here for a month or so now and the discussion seems to be cyclical, almost completely stuck in a loop.

The only questions I'd ask, and i hope I don't cause offense, is whether you all feel that it's worth it, and what do you achieve by continually discussing the same topic?

It's like 'groundhog day'.
Were desperate to get out on the other side and away to deal with factual information, away from the anecdotal, made up non factual stuff

RenovationMan

IveSeenTheLight wrote: »

It's like 'groundhog day'.
Were desperate to get out on the other side and away to deal with factual information, away from the anecdotal, made up non factual stuff

You should follow my blog on the MFW board then, 100% factual and virtually real-time and you have my personal assurance that all good and bad bits will be posted. It'll either be a study in wealth creation or an internet version of car crash TV.

Either way, I'm expecting to ride a rollercoaster for about 10 years which will be especially hairy over the next 3 years. You're all invited along for the ride!