Have a crash now and then lets build a real economy.

julieq

brit1234 wrote: »

Sorry disagree. The reason house prices went up so much was loose lending, mass fraud and too low interest rates. Lending conditions as they are there is no option but falls.

Rubbish, and this claim is regularly demolished by reference to fact. The maximum loan to salary average throughout the boom was 3.5x. Not loose in any sense. There is no evidence of widespread fraud. Default rates were and are low.

And interest rates were not too low, whatever that is supposed to mean anyway.

Remove mortgage rationing and prices will drift up at the level of wages of those competing for houses. Increase populuation without increasing rate of home creation decreases supply and concentrates ownership in that part of the population able to afford them. End of.

StevieJ

brit1234 wrote: »

Sorry disagree. The reason house prices went up so much was loose lending, mass fraud and too low interest rates. Lending conditions as they are there is no option but falls.

Why? what should the interest rates have been?

wymondham

julieq wrote: »

You'll have a bit of a job rewiring and replumbing these days, building regs have moved on quite significantly.

In the unlikely event you manage to buy a house, you need to be looking at Part P building regulations. Plumbing beyond simple replacement also I believe needs certifying by a qualified person. Even changing a back door needs certifying too. It's pretty crazy these days.

Whilst true, I bet 95% of people would be happy to do a plumbing or wiring job in their own home without any permission - home is a castle and all that!

Cleaver

The_Fox wrote: »

I have been in a little of a dream world today, i was earlier thinking about the house that i "might" get if things go the way i want them to go, dropping another 15%/20%.
I was thinking about how i was going to tear it apart and do this that and the other to it. Have a nice woodburner fitted, wooden floors everywhere, do all the plumbing and rewire myself etc etc.

Then i thought if there were another million like me, can you imagine what a boost to the economy that there would be, how many trades and how much retail would be saved.

Maybe your dream is closer than you think.

Just as an example, let's say the house you currently want is £180,000. You have a £30,000 deposit and you get a mortgage over 25 years with an average rate of 5%. Your monthly payment would be £886 if you bought it at these figures.

Now let's say your dream happens and your house falls 15%. Your purchase price would now be £153,000 and your mortgage payment would be £727 a month if the fundamentals stay the same.

To be buying a house at £153,000 you would assume that your income is at least £43,000. So your net take home pay each month would probably be around the £2,600 mark, or £3,600ish gross.

So your 'dream' would mean that you spend a grand total of £159 a month less on your mortgage. Or to put it another way, this 'dream' crash would save you about 4% of your gross income each month.

I'm in the camp which feels that lower house prices would be a good thing, but I'm not really sure that we're going to see falls of 20%. Maybe 5% this year? A bit more maybe? Who knows. We bought around 18 months ago and don't feel that things will be 'terrible' for us because, like hopefully all people who purchase a house, we're in it for the long term and did our sums. And if we move to another house and have to sell this one for less than we paid for it then I don't really care as they house we will be buying will be relatively cheaper. Doesn't everyone buy a house knowing that it's the next 25 years that matter, not the next two or three? During the ownership of this house I fully expect to see mortgage rates of 10% maybe a couple of times, a couple of booms, a couple of busts and whole load of other things along the way. So I'm not really to fussed about a £150 saving on my mortgage in the short term, and certainly wouldn't describe it as a 'dream'.

So I think it's great that FTBers may be able to buy a cheaper house this year. I'm just not sure why you have a 'dream' about a 15% crash, as this won't really make that much difference to how much you spend on your house when you break it down to a monthy amount. Sure, it'll make things a bit cheaper, but not sure it's the massive thing that you make it out to be.

Wheezy_2

julieq wrote: »

In the unlikely event you manage to buy a house, you need to be looking at Part P building regulations.

And installing that wood burner will need compliance with regulation J2 :rotfl:

J2 Combustion appliances and fuel storage systems

Certain fires and heating appliances relay on air infiltration for them to function correctly. They may require purpose made ventilators, or may have relied on air infiltration through existing ill-fitting windows and doors, If you have an open flued appliance in the house that does not have separate provision of combustion air, a check should be made by a suitably qualified person (CORGI, HETAS, NACE, NACS, etc) to ensure that adequate permanent combustion ventilation is provided.

StevieJ

Really2 wrote: »

I had a dream one day, I had sold my house and house prices were tanking and builders were in trouble.
I dreamed that someone would take an offer 27% lower than that were only 4 months earlier based on the fact their was so much fear.

I would dream base rates would fall to 0.5% and I would get a 0.49% lifetime tracker.
.

I feel ripped off, I pay three times more than you :eek:

purch

I'm in the camp which feels that lower house prices would be a good thing

Of course you are.

Then you can move out of your Campsite and buy a house :eek:

StevieJ

purch wrote: »

Of course you are.

Then you can move out of your Campsite and buy a house :eek:

A caravan, one step at a time

Cleaver

purch wrote: »

Of course you are.

Then you can move out of your Campsite and buy a house :eek:

Perhaps I should have picked a slightly better metaphor for that comment...

Wheezy_2

StevieJ wrote: »

A caravan, one step at a time

Cleaver's property ladder