Why are posters so Obsessed with House Prices?

chucky

Graham_Devon wrote: »

Nope.

The only way this would ever work is a fix for 25 years.

Max fix as far as I'm aware is 10 years.

At which point, you move over to SVR or remortgage.

At which point, you pay the going rate for your current debt. Assuming no overpayments, the person who bought cheaper will always win here as their debt will be less and the rates will be the same for both.

For the initial fix years, you are correct. Anything past an initial fix, and the house at the higher price is more expensive in terms of interest and therefore will cost you more.

how are they going to buy cheaper if house prices don't drop?

feel free to avoid the questions...

daisydays

Chaos_A.D. wrote: »

I'm not obsessed with prices, more like I'm hanging around to see what I predicted last year to play out, and it's already on it's way. By the way, good luck on that 25 year 2% mortgage, cloud cuckoo land indeed.

In 25 years you won't have a mortgage, it will have been paid off. Even taking into account interest rates sometimes rising , and possibly having a variable mortgage, your mortgage repayments in 25 years from now will seem like peanuts compared to new mortgages or rents.

Don't forget that interest rates also fall too. It works both ways. Also don't forget that many people take out fixed mortgages, so rising interest rates have no effect on them at all.

At the moment they're forcasting that interest rates will remain as low as they are for the next 4 years, so people will still be taking out mortgages. That's a dead cert.

In answer to the original question, why are people so obsessed with house prices? that's easy. Everyone wants to own their own home. Certainly the people on this forum do! Why else would they be reading a house buying forum?!

SingleSue

I'm not obsessed with house prices, just mildly interested in them because it is numbers...I'm weird like that.

Goodness knows what the interest rate was between 1969-1973/4 ish, my parents purchased in 1969 and paid off in full their mortgage in 73/74 ish..wonder how much that saved them than if they had just kept it going on the 25 year term.

Personally, interest rates are just one facet to take into account, falling prices can have just an impact if you already own and you are coming to an end of a fix...yes, interest rates may be low but if you have negative equity, you will not be able to take advantage of them. So, it is unlikely that you will have the same set low interest rate for the life of the mortgage, other factors like the cost of the house to start with, do have an impact.....as so many who bought at the peak are now finding out to their cost.

Blacklight

I think a lot of it boils down the fact that some people have been ranting about the mother of all crashes for years.

Now that things haven't played out exactly as they predicted, due mainly to government intervention, they absolutely haven't got the humility to hold up their hands and say they got it wrong, missed the bottom and would rather cut off their nose to spite their face. Or argue black is white even if it doesn't make sense. Or refuse point blank to listen to reason or fact.

Good luck to them.

Meanwhile there are hundreds of thousands that have bought over the last two years who couldn't care less about prices bobbing up and down a bit and probably neither know nor care what their interest rate is. They have a home that will be paid off in about 23 years, they can afford the repayments, the capital is going down, their wages going up (promotions will still happen even in the private sector) and they are enjoying being a home owner.

treliac

JonnyBravo wrote: »

Posted: Yesterday, 10:44 PM

More like half a night out. Cash a bit tight eh?

Cheeky.

treliac

sabretoothtigger wrote: »

kudos to b2b3 - cost of finance is the largest cost of housing for most

Which is why people should fix their rate for ten years while possible and the economy is relevant to house prices.

Maybe that is the answer to all debate. Stop waiting for house prices to drop while finance is still cheap.
When interest is 10% and loans have been scarce for a year or so is when your'll see the lower house prices of course you then have the catch 22 problem of likely not being able to afford it

I guess that when I bought in 1996 house prices were low but interest rates were 6% and rising. http://www.houseweb.co.uk/house/market/irfig.html

Never having experienced rates like this before, it probably depends on how low you think house values are likely to go / whether you can get a good fix / how long you think interest rates will stay low.

Get your crystal ball out, do the maths..... it's all a gamble. Buying when prices are low has always seemed to be the best way forward as the debt remains low and is static. High interest rates are increasingly a worry the higher your mortgage.

treliac

chucky wrote: »

i'm here duchess - the best bit about your post is that the usual clowns (minus Malcom - my 2nd top poster) thanked your post. anything that mentions chucky or a something against chucky automatically gets the usual clowns excited, even if they don't agree with it. love it

Aww chucky, don't take it to heart.

nearlynew

Joeskeppi wrote: »

What FTBers need is 10% mortgages to come back with decent rates, yet FTBers seem to be against that.

Spoken like a true debt-jumkie.


Nice one muppet boy.

daisydays

SingleSue wrote: »

Personally, interest rates are just one facet to take into account, falling prices can have just an impact if you already own and you are coming to an end of a fix...yes, interest rates may be low but if you have negative equity, you will not be able to take advantage of them.

Falling (or rising) prices have no impact on someone who already owns. Their house goes up or down - so do others! So it makes no difference at all.

A lot of people take out long term fixed mortgages now. I know someone whose just taken one out over 15 years. They're paying slightly more than the standard rate, but their logic is that in 5 years from now inflation will have gone up anyway, so their mortgage will always be within their means.

For the people who could find themselves in negative equity, that only matters if they want to sell. Many people ride the storm if they're on a variable rate mortgage, and they don't always have to sell. Of course, some people who really overstretched themselves could find themselves in that scenario if they went into negative equity, but they usually just go bakrupt and end up owing nothing. If they've got no assetts, and they're a bankrupt, they have no debts. And two years later their slate is wiped clean.

Remember, back in the early 90s interest rates rose to 17%, and those who'd overstretched themselves were forced to sell - but they all came through it eventually. And those same properties are now worth probably 10 times what they were worth now.

System

nearlynew wrote: »

Spoken like a true debt-jumkie.


Nice one muppet boy.

Spoken like a true moron with no counter argument or even a point as usual.