Parents want a house price FALL to help their children get on the property ladder

carolt

Agree with you re the high LTV lot, silvercar - you're right, they slipped off my list.

And pensioners in negative equity fall into this list.

But to assume that applies to most pensioners is silly - most own homes mortgage-free and have children/grandchildren that are currently priced-out.

You seem to assume that none of them care about this - that it's 'I'm alright, Jack', all the way. I don't believe most pensioners are as selfish as you appear to believe.

Really2

carolt wrote: »

You seem to assume that none of them care about this - that it's 'I'm alright, Jack', all the way. I don't believe most pensioners are as selfish as you appear to believe.

So would people on here saying pensioners are robed of interest be a smoke screen argument.

If they want falls they must be OK with rates as they are then? you cant have both.

carolt

What are you on?

Falling prices are usually due to high rates not low rates! Think early 90's.

There is no correlation between falling prices and low rates; the reverse is usually true.

Or to put it another way; if they raised rates, prices would fall a hell of a lot quicker - I think even you can figure that out. What is astonishing about the current falls - and shows just how precarious the market currently is - is that house prices are falling even though base rates are at historic lows.

silvercar

carolt wrote: »

Agree with you re the high LTV lot, silvercar - you're right, they slipped off my list.

And pensioners in negative equity fall into this list.

But to assume that applies to most pensioners is silly - most own homes mortgage-free and have children/grandchildren that are currently priced-out.

You seem to assume that none of them care about this - that it's 'I'm alright, Jack', all the way. I don't believe most pensioners are as selfish as you appear to believe.

No the pensioners aren't selfish, they want their equity to help their children (or grandchildren) with deposits or future inheritance.

If you erode their equity with falling house prices, they either won't have enough to live on or they won't be able to help out their offspring.

carolt

You're not being logical!

If prices fall, their offspring won't NEED help, will they?

silvercar

carolt wrote: »

You're not being logical!

If prices fall, their offspring won't NEED help, will they?

Depends how much help they need and how much prices fall.

ILW

MadnessOfHPC wrote: »

Yes they will because mortgage availability will be scarce. But that's exactly how you want it, cheap housing for only the few. Horrendous view.

Only the right sort of people should own houses anyway.

ukcarper

I am not quite a pensioner yet and have read this thread with interests. I live in Southern England and a couple where one was on Average wage of £25k and the other was on £15k could by a buy a 3 bed terrace with a 4x joint mortgage and 20% deposit. I would think that the thing stopping them would be the 20% deposit i.e. £40k. If house prices drop 20% that deposit becomes £32k which would probably still be a problem, but the equity in my £200k house would drop by £40k leaving me less able to help them if wanted to.

Just as an aside it says "a third of middle class parents" I own my house and would not consider myself middle class.

Really2

carolt wrote: »

What are you on?

Falling prices are usually due to high rates not low rates! Think early 90's.

There is no correlation between falling prices and low rates; the reverse is usually true.

Interest rates fall when house prices fall carol. Usually because of a recession.

Are you really arguing otherwise?
http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp

Last house price crash

Tue, 08 Feb 1994 5.13
Tue, 23 Nov 1993 5.38
Tue, 26 Jan 1993 5.88
Fri, 13 Nov 1992 6.88
Fri, 16 Oct 1992 7.88
Tue, 22 Sep 1992 8.88
Tue, 05 May 1992 9.88
Wed, 04 Sep 1991 10.38
Fri, 12 Jul 1991 10.88
Fri, 24 May 1991 11.38
Fri, 12 Apr 1991 11.88
Fri, 22 Mar 1991 12.38
Wed, 27 Feb 1991 12.88
Wed, 13 Feb 1991 13.38
Mon, 08 Oct 1990 13.88
Fri, 06 Oct 1989 14.88
Fri, 08 Sep 1989 13.75
Mon, 04 Sep 1989 13.88
Thu, 31 Aug 1989 13.84
Thu, 25 May 1989 13.75

This one

Thu, 05 Mar 2009 0.50
Thu, 05 Feb 2009 1.00
Thu, 08 Jan 2009 1.50
Thu, 04 Dec 2008 2.00
Thu, 06 Nov 2008 3.00
Wed, 08 Oct 2008 4.50
Thu, 10 Apr 2008 5.00
Thu, 07 Feb 2008 5.25
Thu, 06 Dec 2007 5.50
Thu, 05 Jul 2007 5.75

So when house prices fall, they get less interest.

Heyman_2

carolt wrote: »

What is astonishing about the current falls - and shows just how precarious the market currently is - is that house prices are falling even though base rates are at historic lows.

That would be true if banks had responded to the historically low rates by lowering their Mortgage rates accordingly.

But they haven't - barring existing tracker deals and to a lesser extent SVRs, they've simply taken the opportunity to increase their margins by raising fixed rate mortgage rates slightly, despite the low base rate.

The precarious nature of the market is more related to the lack of availability of these deals because of the unwillingness of banks to take any kind of lending risks anymore. It's a problem that goes beyond the housing market unfortunately.