House Price Crash

Jim_B_3

It's all getting a bit http://ayup.co.uk/avina/twoyork.jpg

manhattan

Hereward wrote:

I'm quite sure that if you bought the right car it would appreciate. IIRC when the Audi TT was first introduced they were worth more second hand than they were brand new from the dealership. This was caused by the long waiting lists, so those who already owned one could sell it for a profit and be placed back onto the waiting list.

thats very true!
i purchased a new one in 2002,and sold it 8 months later for a profit!

the long waiting list caused this.

Mrs_pbradley936

A great deal of this "have it now" mentality is probably the fault of people like me who had a hard time and no luxuries growing up not wanting their own children to go without. When I was born rationing was still in place after the war and everyone had a “make do and mend” attitude. I suppose we went too far with our children in that we wanted them to have nice things and not to know what it is to want. Having said that I would not get into debt to buy "goodies" but I did want my children to have more than a roof over their head.

Mrs_Optimist

have read this very long thread with interest. As a homeowner who bought in 1996 (and scrimped, saved and went without a social life for 18 months to save for the deposit) Mr O and I have made a lot of money in our home, and unlike the vast majority of our friends and neighbours, we have not withdrawn the equity. As a result now our family is complete we would like to move up the ladder a couple of rungs to a bigger property, somehwere we want to call home for the next few couple of decades until our children are adults and we can hopefully assist them in buying their own homes and sell up and downsize, since it will be just the two of us. I cant quite get my head around the thought that if we sell up and use the equity as a large deposit for our new home, if the market crashes have we done a bad thing by selling up in the first place? I know that noone can predict a crash but I just cannot get my head around whether it is a sensible thing to do or not (answers on a postcard please!)

elona

As long as you would be moving to use the new place as a "home", you can afford the mortgage etc and can wait for about a decade, this would seem sensible to me.

RHemmings

Mrs_Optimist wrote:

have read this very long thread with interest. As a homeowner who bought in 1996 (and scrimped, saved and went without a social life for 18 months to save for the deposit) Mr O and I have made a lot of money in our home, and unlike the vast majority of our friends and neighbours, we have not withdrawn the equity. As a result now our family is complete we would like to move up the ladder a couple of rungs to a bigger property, somehwere we want to call home for the next few couple of decades until our children are adults and we can hopefully assist them in buying their own homes and sell up and downsize, since it will be just the two of us. I cant quite get my head around the thought that if we sell up and use the equity as a large deposit for our new home, if the market crashes have we done a bad thing by selling up in the first place? I know that noone can predict a crash but I just cannot get my head around whether it is a sensible thing to do or not (answers on a postcard please!)

Can you post some "representative numbers" for what your house is valued at, and the typical price of the more expensive properties that you'd be likely to buy?

Mrs_Optimist

yes, sorry

Our house is valued at £170k with a mortgage of £39k. FIL is putting up £100k (cash) as he will be living with us. So we should have £200k cash to put as a deposit for new home (the remainder to cover fees, stamp duty etc). We would be looking to spend between £250k-£300k (250k would be great since we want to become mortgage free in the short term) which means a mortgage of around £800 per month. Obviously less if we can but we want to have somewhere decent to live comfortably for the next 15-20 years. it should be clear to me about the effects of the proprty market crashing, I know that we have made money on our house if we sell now no matter what, but if we put that money as a deposit for a new bigger home and the market price somes crashing down, have we really lost that money? I suppose if we are going to be there for a long time then prices will eventually go up again anyway? Sorry if this is not making any sense, I am trying to think and type at the same time!!

RHemmings

AndrewSmith wrote:

Who gives a damn if you do not have the latest designer shoes? Save for them and buy them when you can afford it. When I was a child and we had to move out of the farm cottage we were happy with furniture given to us by relatives, friends etc. When I bought my first house I furnished it from the Oxfam shop and what family were giving away. OK, it wasn't a swish loft apartment furnished in the lates contempary designs but everything in it was MINE. This then meant that when I sold the house having not increased the mortgage to buy consumer durables I was able to truly trade up using the equity in the house.

The majority of people setting up homes these days are not content with anything less than brand new. It is the fault of the materialistic society in which we live.

But is this true? The majority of people I know of who are looking for houses would be satisfied with anything that meets their needs. I thought that the newbuild flats mostly sold to people "investing" in BTLs. Is there any hard evidence that most people setting up homes want a new property? If that was the case, why are prices for old properties so high, if nobody wants them?

And if people are interested only in the latest designer shoes, why are cut rate shoe shops like ShoeZone booming. Why are cut price clothing shops like Primark taking over. There may be some people who insist on their designer labels. But I'd think that most people are being much more careful with their money. If not then why are Primarks and ShoeZones opening up all over the country?

I'd say that the vast majority are economising, through necessity rather than choice. Perhaps you're misinterpreting the "lifestyles" pushed on television as what real people do.

Hereward

RHemmings wrote:

But is this true? The majority of people I know of who are looking for houses would be satisfied with anything that meets their needs. I thought that the newbuild flats mostly sold to people "investing" in BTLs. Is there any hard evidence that most people setting up homes want a new property? If that was the case, why are prices for old properties so high, if nobody wants them?

Are you sure that they would be something theat meets their needs and not their wants?

And if people are interested only in the latest designer shoes, why are cut rate shoe shops like ShoeZone booming. Why are cut price clothing shops like Primark taking over. There may be some people who insist on their designer labels. But I'd think that most people are being much more careful with their money. If not then why are Primarks and ShoeZones opening up all over the country?

I'd say that the vast majority are economising, through necessity rather than choice. Perhaps you're misinterpreting the "lifestyles" pushed on television as what real people do.

I disagree, people seem to want both: they will buy some designer stuff (which they are willing to pay a lot for) and, in order to afford the design stuff, some very cheap stuff that look like it's designer stuff and compliments the stuff they have already bought.

jezebel

Jim_B wrote:

Yes, they would. The next person who tells me I should buy fewer plasma televisions and iPods is going to get an abusive response.

You're not alone Jim, I am sick and tired of the mentality of people spouting on about the "have it now" generation who wouldn't or couldn't live without.

I'm a twenty-something now but have been saving regularly since I was 16. I have a credit-card which I only use for emergencies and large purchases for the sake of the added insurance (which I pay off at the end of every month). I don't go out more than about once a month which includes trips to pubs/cinema/hanging out with friends. I put away any "disposable" income I may have after the month of required spending into a savings account and am working on getting a deposit for a house. My "dream house" is a one-bed flat close enough to home that I can see my parents once in a while.

Like lynzpower I had some second hand stuff and gifts to go away to Uni and I've kept anything that I did have (crockery, pots and pans, hand me downs from other friends/students) so that when I move into my own house I have the basic essentials to live on and have somewhere to start from.

Okay, I have an I-pod and a television, but both were presents for birthdays and christmases from friends and family.

I resent any generalisations about people my age because even with this modest living I couldn't get a house even with a mortgage of 4 times my income (which I am far too sensible to ever take out!). I pray each month for stability in house prices, I'm not expecting a crash but wish that they would at least plateau so that I'm in with a fighting chance.