Selfish Britain

ALIBOBSY

The best outsome would be if house prices stagnate or have a small fall and do not go up again for a good 10 years or maybe more. Wages would slowly climb and start to make mortgage payments easier and no one would be in Neg equity (or not by much). Problem is people were encouraged to over stretch themselves. My Mum and Dad talking against a background of their experience in the 70's told us to stretch ourselves as much as possible when you buy as time will pass you wage goes up and it becomes easier as you go along. This was spoken about as by them and their friends as gospel so to speak. Even after recessions in the eighties many of that baby boomer generation still see the housing market like that.

It was only when my OH pointed out the inequality about loan to wage ratios compared to when we bought and they bought that they thought twice about it. My Mum still goes on about being time to "move up the ladder" like its something that has to happen. This despite the fact that to go from the 3 bed semi we are in to the 4 bed detached she thinks we should move to our mortgage would have to quadruple (we bought in mid 1999 so were lucky, got in just as prices started to go crazy) we on earth would we saddle ourselves with that sort of debt?????

ali x

Sibley

Good post, and I think we know a few people that post on this forum who "don't give two hoots that young families are forced to live in undersized accomodation if this is the result of high house prices" (:beer:).

In fact, they positively encourage people to "get on the ladder", thus helping the madness to continue.

In a way, their advice is quite sensible, but I think it is often being given with self-interest in mind, rather than a genuine act of being helpful.

Who forces young families into small accomodation?

Why don't they wait until they have the means to support their family properly before they start having kids? Wait until the time is right.

littlerat

Sibley wrote: »

Who forces young families into small accomodation?

Why don't they wait until they have the means to support their family properly before they start having kids? Wait until the time is right.

Because science hasn't caught up yet?

thequant

Sibley wrote: »

I suppose you would want your house to lose 50% of it's value then?

Well, if you had one that is. I promise you once your names on a set of deeds you will be happy it rises. I do care about other people being priced out but I care about my retirement and family more. Sorry an all that.

Here's a rough worked example,

Couple with young kids buy a house in say 1999 for 100K, flats are £60k at the time.

in 2010, that house is now worth £300k and the flat is £200k.

in 1999, couple bought house with 10% deposit on a repayment mortgage, 10/25ths=2/5 ths of the term of the mortgage have elapsed and couple have paid off approx £40k off mortage.

outstanding debt on house is £50k buy hey they have £250k of equity, whoppee do :j

However one of the kids have left home and cant find anywhere to live and need 25% deposit to buy the flat. parents MEW to give kids £50 K deposit.

parents now owe 100K on their house,i.e. more than when they bought it!

net result they are still in the same house, but with more debt than they would of had without HPI.The equity means sweet FA as you still need a house to live in.

if anymore kids want flats, parents are going to have spent their working lives actually going backwards in terms of the debt they have and still be in the same property.

what is the point of all of this gained equity for your kids if you are going to have to MEW it away to get them on the ladder themselves.

ukcarper

ALIBOBSY wrote: »

The best outsome would be if house prices stagnate or have a small fall and do not go up again for a good 10 years or maybe more. Wages would slowly climb and start to make mortgage payments easier and no one would be in Neg equity (or not by much). Problem is people were encouraged to over stretch themselves. My Mum and Dad talking against a background of their experience in the 70's told us to stretch ourselves as much as possible when you buy as time will pass you wage goes up and it becomes easier as you go along. This was spoken about as by them and their friends as gospel so to speak. Even after recessions in the eighties many of that baby boomer generation still see the housing market like that.

It was only when my OH pointed out the inequality about loan to wage ratios compared to when we bought and they bought that they thought twice about it. My Mum still goes on about being time to "move up the ladder" like its something that has to happen. This despite the fact that to go from the 3 bed semi we are in to the 4 bed detached she thinks we should move to our mortgage would have to quadruple (we bought in mid 1999 so were lucky, got in just as prices started to go crazy) we on earth would we saddle ourselves with that sort of debt?????

ali x

It’s wage inflation not the housing market that makes stretching yourself viable, if your mortgage was a third of your take home pay wage inflation as low as 3% would increase the money available to you after your mortgage has been paid by 25%.

You like a lot of people unsurprisingly judge what older people did and think by their parents. I am in that dreaded babyboomer group and I can tell you a lot of people didn’t stretch themselves to climb the property market.

One of the problems now is that it is possible to stretch yourself a lot further than you could in the 70s and 80s but that doesn’t have much to do with the majority of older people who have just worked hard and paid their mortgages.

nearlynew

Anyone who says it's just as easy for youngsters to buy a house today as it was, say, 20 years ago is talking out of their 4rse.

1984ReturnsForReal_2

nearlynew wrote: »

Anyone who says it's just as easy for youngsters to buy a house today as it was, say, 20 years ago is talking out of their 4rse.

Farse?.....

markharding557

Sibley wrote: »

Who forces young families into small accomodation?

Why don't they wait until they have the means to support their family properly before they start having kids? Wait until the time is right.

Because in many cases that would be never

Degenerate

nearlynew wrote: »

Anyone who says it's just as easy for youngsters to buy a house today as it was, say, 20 years ago is talking out of their 4rse.

20 years ago the BOE base rate was 14%.

So let's take a house in Greater London worth £100K at Q3 1990 prices as an example. According to the Halifax price calculator, this house is worth £278,294 in Q3 2010. Assuming a spread of 4% over BOE base rate (fairly typical at the moment) for argument's sake:

Q3 1990: £100,000 over 25 years repayment @ 18% = £1,517.43 per month.
Q3 2010: £278,294 over 25 years repayment @ 4.5% = £1,546.85 per month.

Wow, those are pretty close. Wait a minute, how much has income risen since 1990?...

AD9898_2

1984ReturnsForReal wrote: »

There is a few of them on here.


And a couple that have obviously already done it & anyone could be their next target.


Best to keep a low profile.

To me, the more you crow about house prices rising the more likely it seems you'll be in the !!!!!! if they fall, you see it on here all the time by the usual suspects.

For instance I own but because I have no mortgage I couldn't give a toss if they fall or not, I think the more leveraged you are the more likely you are to shout about falling prices.

And it's the same country wide.