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Debate House Prices
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Warning to house buyers
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milliebear00001 wrote: »House prices in my town are most certainly lower than they were in 2007. I am buying a house I definitely couldn't have afforded in 2007 when it would have been at least £20000 more. My mum's inner-city house isn't selling either - overpriced compared with what it was worth in 2007. My friend's inner city London flat is expected to fetch at least £20,000 less than she 'wanted' for it - and far less than it would have sold for in 2007.
Clearly, there are many areas where house prices are lower today than they were in 2007.
I also don't see much mileage in 'waiting for the crash' because I don't buy a house as an investment, but as a home. I couldn't really care less what happens to the market in the short-medium term because I expect to stay in my house for at least 10-15 years. I expect many people feel the same as I do.
Don't the indices for the UK as a whole say that house prices are 5-10% below 2007? It depends which lot you ask but I think that's right.0 -
These weekly battles are getting so boring. One thing for sure. A £200k house in 2007 isn't cheaper to buy now. If you've chucked 3 years rent away waiting for a crash you have a lot to catch up on. Your landlord is happy to be recieving your money. His mortgage will be shrinking whatever happens.
As far as I'm concerned the longer rates stay at this level and tenants keep holding out for a crash the better.
This is not a conspiracy by tenants to engineer a price crash. Most tenants rent because property prices have gone far beyond any reasonable measure of affordability. Young people are now saddled with large student debts, higher taxes, falling incomes and a shortage of jobs. This comes at a time of exceptionally high house prices and new demands for large deposits.
Like rent, mortgage interest payments are non refundable and do not give you ownership of the property. You get ownership by paying off the capital debt. At times of zero house price inflation, renting is cheaper than buying. At times of falling house prices, renting is vastly cheaper than buying. As it happens, house prices have fallen since 2007.
Some BTLs try to justify their business case by comparing mortgage payments with rental income. If the net debt on the property is low, they congratulate themselves on the high yields. This approach however represents a flawed analysis. A valid business case has to take account of risk, capital tied up in the property and debt when comparing investment options. On this score UK property is a complete dog as an investment.
The house I rent today is larger than the one I rented 10 years ago and costs me 17.6% less. What does that say to you about the benefits of BTL?0 -
A £200k house in 2007 isn't cheaper to buy now.
Sibley you don't live in a £200k house you live in Maidstone:eek:
Fella, I've checked out your Postcode and it don't look too good!
http://www.houseprices.co.uk/e.php?q=ME16+0GQ&n=100 -
The house I rent today is larger than the one I rented 10 years ago and costs me 17.6% less. What does that say to you about the benefits of BTL?
You have moved to a crappy area
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
House prices round my way are slightly higher than at the peak of the boom in 2007. However, these are the asking prices; they're not selling at these prices. A few are shifting at significantly lower rates, but in general the market is stagnating. Check this out:
http://www.housepricecrash.co.uk/graphs-average-house-price.php
Now check this out:
http://www.housepricecrash.co.uk/graphs-bubble-lifecycle.php
Not specifically for house price bubble - just any bubble - but where on it would we appear to be, given that measures (e.g. ultra-low interest rates) have fuelled the Return to 'Normal' phase?0 -
House prices round my way are slightly higher than at the peak of the boom in 2007. However, these are the asking prices; they're not selling at these prices. A few are shifting at significantly lower rates, but in general the market is stagnating. Check this out:
http://www.housepricecrash.co.uk/graphs-average-house-price.php
Now check this out:
http://www.housepricecrash.co.uk/graphs-bubble-lifecycle.php
Not specifically for house price bubble - just any bubble - but where on it would we appear to be, given that measures (e.g. ultra-low interest rates) have fuelled the Return to 'Normal' phase?
Oh! that chart again 'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
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Some BTLs try to justify their business case by comparing mortgage payments with rental income. If the net debt on the property is low, they congratulate themselves on the high yields. This approach however represents a flawed analysis. A valid business case has to take account of risk, capital tied up in the property and debt when comparing investment options. On this score UK property is a complete dog as an investment.
The property I bought as a BTL in Jan 2007 has increased in value, has had 16 days void in the three and a half years and the tenants have helped to significantly reduce the outstanding capital.
What does that tell you about your analysis of investment property?:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0 -
It says that in your area, and your specific case, you played the game correctly.IveSeenTheLight wrote: »The property I bought as a BTL in Jan 2007 has increased in value, has had 16 days void in the three and a half years and the tenants have helped to significantly reduce the outstanding capital.
What does that tell you about your analysis of investment property?
It does not mean that the BTL Mum and Dads buying city centre flats in their thousands made the right move. Some of these people will have taken their money out of boring savings accounts or shares or premium bonds or their own house and invested the lot in these inflated and risky schemes.0 -
It says that in your area, and your specific case, you played the game correctly.
It does not mean that the BTL Mum and Dads buying city centre flats in their thousands made the right move. Some of these people will have taken their money out of boring savings accounts or shares or premium bonds or their own house and invested the lot in these inflated and risky schemes.
I never stated that my example was one that could be shown as an example for all BTL. It does however quash macaques assumption that all BTL "is a complete dog as an investment".
Indeed, I could agree with him if he annotated to say it was the dog's b0llocks
Originally Posted by macaque
On this score UK property is a complete dog as an investment.:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0
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