Tonight with Trevor McDonald

inspiremetosave

I took out an IO mortgage in January as a first time buyer. This is two years fixed and after that time is up we will switch to a repayment. We did this because we had no furniture etc and wanted to spend the first two years furnishing/redecorating the house.

Pobby

The real issue in this I feel is inflation.It`s over 30 years since I bought my first home.At the time and for many years later we had inflation.So my loan of £9,000 was drifted away as my wages soared.That coupled with promotion meant that my mortgage was a diluted year after year.

Tootsie_Roll

Ad wrote:

Check out housepricecrash.co.uk there is a wealth of information it will really open your eyes.

Oh that well known completely non-biased site that has been predicting a house price crash for at least 2 years - always just about to happen. I suppose eventually it might and eventually they may be right.

The attitude of some of the posters even makes me look like a saint and the hypocrisy of it all just stuns me.

wibble68_2

Pobby wrote:

The real issue in this I feel is inflation.It`s over 30 years since I bought my first home.At the time and for many years later we had inflation.So my loan of £9,000 was drifted away as my wages soared.That coupled with promotion meant that my mortgage was a diluted year after year.

Yes. That's the way things were in the past.

This is a good example of why the low inflation environment we now live in may not be as good as it seems.

PoorDave

Ad wrote:

Oh... here’s one how about the endless immigration coming into the country to artificially keep down wages which also helps to push up the cost of buying a home. Check out housepricecrash.co.uk there is a wealth of information it will really open your eyes.

Also write and ask your local MP just how many 'Buy to Let' properties he/she owns!

Housepricecrash eh?

http://www.amazon.com/gp/product/customer-reviews/B0006JIHSC/ref=cm_rev_sort/102-1151283-1561751?customer-reviews.sort_by=%2BOverallRating&s=theweb&x=9&y=12

Doesn't sound like something we should waste our time looking at. Seems more like an "it's not fair mummy - a bigger boy took all the houses away" *sniff* whingefest to me

noyk

ukbondraider wrote:

The problem in my opinion is the notion that everybody should have the right to buy their own house.

All I hear is that we pay our taxes so we should get this and that...and because we are brits we should get council houses first etc etc.

The basic facts are that owning houses is a luxury and not the norm and should be treated this way. I'm sorry but it makes me cringe when I read here about people who earn £20K for e.g and want to buy a house. If I was earning £20K I wouldnt even be thinking about a house but instead be looking to improve my job prospects or simply concentrating on saving and living in cheap accomodation to be able to provide for the future. However instead alot of these people rent out nice flats because they want to live a lifestyle. Why should some live a lesser lifestyle and save whilst over carelessly spend and then expect to go on the housing ladder.

People on £20K for e.g should be living life on a very strict budget a situation I have experienced being raised this way by my parents. No holidays, No sky TV, no going out. You can bltch and moan but the fact remains that you havent been as lucky or as hardworking as others to get to a step where you afford this new luxury of a house.

Its hard for me to put across this post without sounding like a c*nt but britain is a nation of careless spenders and buying houses is an example. Financing cars is another example and not only are you paying lots of interest but you lose a bundle on the immediate depreciation.

At the end of the day, people shouldnt be moaning about house prices going up etc but instead kicking themselves because they didnt get straight A's at school or didnt have the motivation to start their own business etc etc. Its very easy to blame others but alot of people need to look at themselves. Life is about competition and this competition is now global so dont expect to be spoon fed and to have a super efficient NHS system simply because you pay your taxes. Work hard and get ahead. Of course I know many start off more fortunate than others but there are always opportunities to direct you life down a different path something I know about 1st hand.

I am fourtunate in that I earn significantly more that what statistics say is the average national wage but I still drive a £8K car yet people on the same street as me who have houses half the size are pulling out in their new £50K Bmws and Mercs etc. Why should I only drive a £8K car when I earn alot more than them? The answer is because I treat house ownership as a luxury and have thus focused life that way.

With interests rates slowly going up and the economy well into its boom cycle it is only a matter of time for the bust cylcle to emerge something that economist feel is only a few yrs away. People struggling now will only find things tougher in the yrs ahead and in a way have no one to blame for their careless behaviour.

Thats such an over generalisation it's ridiculous. Why should someone on 20k (which is a good wage in many parts of the country and a great wage if in other parts of the world) not enable you to buy a house? Think before you type.

dunstonh

Its not a case of when a crash may or will happen. Its a case of people assuming that prices will rise like they have done over the last 10 years and there is nothing going to stop that from happening.

There could be price crash, there may not be. There could be a period of no change. Nobody knows. However, with most indicators getting back to the gaps of 1991 when the last crash happened, it does make sense to budget for the worst.

The lack of understanding about the level of risk being taken on mortgaged buy to lets is amazing. Someone mentioned endowments earlier in the thread. Well, an endowment was a scheme where you paid the interest on the mortgage and contributed to an asset regularly in the hope the investment part would pay off. A mortgage buy to let is not too different. You are paying an interest only mortgage in the hope that the asset rises in value and that the income remains. Many endowments have failed and you can get redress and blame the insurance companies. When the mortgage buy to let fails, who is going to get the blame then and who is going to pay for it?

The stupidity of people who think that a second property will be their pension when its being purchased on an interest only basis is amazing.

Example.
Property purchased for £150k with a mortgage of £100k on interest only basis. Rental income covers mortgage but no surplus.
Right, lets get to just before retirement. Lender needs repaying which means the house has to be sold. Lets say its now worth £450k.
In simple terms, £120k of that will go in tax, £100k will go back to the lender and that will leave you £230,000. All that work, risk and hassle for a small pot of £230,000 which in 30 years time will have the spending power of £78,890. Which if used to give an income, it is £3944 p.a. in today's terms.

Now, lets look at another scenario and increase mortgage rates by 50% (which is certainly a possibility or even a probability at some point in a 30 year mortgage). That rental income is no longer covering the mortgage and you are having to pay £900 pm for the mortgage buy to let when the rental income is £600. Can you afford to find that £300 each month?

Or, tenant does a bunk after not paying for 3 months. Can you afford that £2700 in mortgage with no rental income at all in that period. Or tenant causes £5000 of damage...

If people know and understand the potential risks and then still choose to do it, then that is fair enough. However, its the number of people who go into this totally blind with no understanding of what they are doing and the possible consequences that beggars belief.

garry_s

God - you are a cheery bunch. If people wish to take out a huge mortgage and live off £25 per week and work part time as a barmaid then that is up to them. It is their free choice. I say - good luck to them. I've worked all my life full time as well as part time and had huge mortgages. It was better than living in a property owned by some whimisical landlord. It is up to that person to decide the standard of life they wish to have. If they need to work but neglect their children then they need to seriously consider whether it is worth such a sacrifice.

benbenandme

For the first time ever I didn't totally agree with the-good-saint-Martin last night ... while it seems everyone wants to own their own property for me it was a cheaper option than renting. I think the problem is that too many people want to own a bigger property than is necessary, many people think they have the right to a huge house that is out of their affordability rather than settling for a basic property that might be smaller than they'd like or in a less desirable area than they would want.

noyk

I think the problem is banks, bs, builders and ea's encouraging higher prices to the detriment of everybody accept themselves (with the help of bad or intentional goverment policy on planning).

Wanting a home of your own is prefectly fine - but the media built it up into something it is not - the answer to all ill's.

Why is it not possible to buy or build a home for an affordable amount? That is the real question we should be asking. It is a fundamental need for everybody - it should be possible.