house prices continue to drop ....

IveSeenTheLight

des_cartes wrote: »

Why not? How do higher houseprices benefit houseowners?

Increasing house prices increase the equity in the property thus can help to attain a better mortgage rate.

Increasing price mean that in the future they may have the option to downsize releasing equity to help fund retirement

Increasing prices mean that you have an option to sell the asset and be far better off than if you rented during that time.

Increasing prices mean no risk of negative equity, not stuck in a property or mortgage product (SVR)

Off the top of my head, but is that enough?

System

des_cartes wrote: »

Why not? How do higher houseprices benefit houseowners?

For me personally? The next band of LTV saves me £150 a month. very MSE I'm sure you'll agree.

In general, Hamish has answered that about 50 times and I agree with 90% of it.
http://forums.moneysavingexpert.com/showpost.html?p=26483019&postcount=39

wherediditallgothen

des_cartes wrote: »

Perhaps Tesco, Sainsburys and Asda could start posting promoting the benefits to consumers of raising the price of bread, or maybe they would think thats a bit odd on a forum that is supposed to encourage contributions from people wanting to publicise money saving rather than money wasting.

Good news for people who like toast, the price of bread went up again this month. Kingsmill's price index went up 1.5%, and the average loaf is now worth 20 quid.

des_cartes

IveSeenTheLight wrote: »

Increasing house prices increase the equity in the property thus can help to attain a better mortgage rate.

Increasing price mean that in the future they may have the option to downsize releasing equity to help fund retirement

Increasing prices mean that you have an option to sell the asset and be far better off than if you rented during that time.

Increasing prices mean no risk of negative equity, not stuck in a property or mortgage product (SVR)

Off the top of my head, but is that enough?

Pretty much pales into insignificance when you want to trade up though. All those 'potential savings disappear when instead of it costing you 50k to trade up, the difference has become 100k because house prices have doubled and you can no longer afford that bigger house you need (unless you lie about your income, err no wait a minute thats been banned now so you're stuck until prices fall).

System

I don't think we're in danger of house prices doubling any time soon, besides which there was factual evidence that showed house price reductions weren't helping upsizers either, the price of houses "lower down the ladder" fell faster than those higher up, making the rungs of the imaginary ladder even wider.

IveSeenTheLight

des_cartes wrote: »

Pretty much pales into insignificance when you want to trade up though. All those 'potential savings disappear when instead of it costing you 50k to trade up, the difference has become 100k because house prices have doubled and you can no longer afford that bigger house you need (unless you lie about your income, err no wait a minute thats been banned now so you're stuck until prices fall).

Not in my experience.
I managed to upsize in a rising market.
Many people throughout the UK had and do manage to do so.

My friend has just moved last Friday from a 1 bed flat to a four bed detached. He also didn't need to sell so will rent out the 1 bed flat.

Not all areas of the UK are unnafordable

PasturesNew

Round My Way .... there was a "Get Moving - Open Weekend", no appointments necessary on about 500+ houses I think. Anyway, that was last weekend. Now it's "Good News: Get Moving has been extended to 15th October". So I guess they didn't flog any then.

They'd all dropped the price too.

des_cartes

IveSeenTheLight wrote: »

Not in my experience.
I managed to upsize in a rising market.
Many people throughout the UK had and do manage to do so.

My friend has just moved last Friday from a 1 bed flat to a four bed detached. He also didn't need to sell so will rent out the 1 bed flat.

Not all areas of the UK are unnafordable

Ask yourself one question. If house prices were half what they are today would it be less expensive to trade up? The clue is in the forum name.

IveSeenTheLight

Joeskeppi wrote: »

I don't think we're in danger of house prices doubling any time soon, besides which there was factual evidence that showed house price reductions weren't helping upsizers either, the price of houses "lower down the ladder" fell faster than those higher up, making the rungs of the imaginary ladder even wider.

Additionaly, falling prices eat into the equity / deposit requirement for a larger place.

Let's say you bought a place for £100k (10% deposit) and it increased to £150k.
You have £50k equity + capital paid down (lets say £15k including previous deposit) as a deposit towards a property that was £200k but now £300k.

You have a £65k deposit towards the £300k property or a 21.66% deposit.

If prices had stagnated, you would only have £15k towards the £200k property meaning a less than 10% deposit and thus you may not be able to upsize regardless of the lower purchase price.

IveSeenTheLight

des_cartes wrote: »

Ask yourself one question. If house prices were half what they are today would it be less expensive to trade up? The clue is in the forum name.

Already answered in my above post.

Property prices not increasing could exclude people from having the option to upsize