House prices 'to fall by 20%'

StevieJ

Coeus wrote: »

http://www.dailymail.co.uk/news/article-1358985/House-prices-fall-20-years-Joblessness-spending-cuts-stifle-demand.html

Daily Mail is catching on too

20% in two years time - exactly as planned. Let the good times roll FTBs!

Celebrating joblessness let us just hope you are not one of them

The property market is heading for a ‘double-dip’ as rising unemployment and spending cuts strangle demand, according to the analysis.

anjb

Enigma80 wrote: »

Yes but you'll also lose value in your current property, so any rise or drop isn't going to make a difference if you're simply transfering your mortgage. Unless I that is you're going to be putting more capital into it.

I might have got it all wrong though.

That's true, but to get a better house you generally have to put more money into purchase.

Lets say my house now was worth 200k and I wanted to buy a house of 350k.

EA fees for sale @ 2% = 4k
Stamp on 350k @ 3% = 10.5k
Assume legal costs + others 2k
Move is therefore 16.5k +additional mortgage 350-200= 150k

Now if there's a 50% crash in the market

EA fees for sale @ 2% = 2k
Stamp duty @ 3% = 5.25k or at 1% = 1.75k (not sure if bands would change)
Assume legal costs + others 2k
Move is 9.5k or 5.75k + additional mortgage 175k-100k = 75k

So the cost to move is either 7k or 10.75k less due to crash in fees and a whopping 75k less to borrow.

I wont pretent that i'm impressed with the state of things, if i had bought in 2009 i would have saved *a lot* of money, and has possibly been the worse start to make as a FTB with a single income as well.

But i made the best choice I could, given the information and my circumstances at the time of purchase, so I am where I am now. It's been a bitter pill to swallow, i've always tried to be careful with money and there will be a lot of people that will say... I told you so etc. But despite what people say here, no one has a crystal ball.
If they did they would have sold up all assets in 2000 and bought gold sovereigns.

Ok i've made some assumptions above that I can get a mortgage etc but at present I have 50% equity to play with now - been over paying like a goodun - and will be clear by 36 at current rate. I can 'afford' for the market to do what it wants to do.
If the market does crash, there's going to be some tough times, especially if the interest rates go through the roof.
All I can do at present is mitigate risk, that being majority savings in overpayment. I feel there's too much risk in other investments at the moment given my circumstances (fixed rate mortgage).

Regards

AD9898_2

StevieJ wrote: »

Celebrating joblessness let us just hope you are not one of them

I'd say the main reason for any drops probably as more to do with the market running out of mugs willing to pay current prices, mortgage approvals seem to point to this.

StevieJ

AD9898 wrote: »

I'd say the main reason for any drops probably as more to do with the market running out of mugs willing to pay current prices, mortgage approvals seem to point to this.

You may be correct but my point was aimed at the poster celebrating jobs lost to enable falling house prices:eek:

Mallotum_X

If the jobs are part of public sector cut backs then it wouldnt be all bad.

ukcarper

Mallotum_X wrote: »

If the jobs are part of public sector cut backs then it wouldnt be all bad.

Lets say the person was earning average wage of £25k had 2 kids and was renting a house for £600 a month. They would be able to claim excluding child benefit £19,250 a year in stead of paying £5,825 tax and National Insurance. So it’s not always so clear cut is it.

Mallotum_X

ukcarper wrote: »

Lets say the person was earning average wage of £25k had 2 kids and was renting a house for £600 a month. They would be able to claim excluding child benefit £19,250 a year in stead of paying £5,825 tax and National Insurance. So it’s not always so clear cut is it.

You have to start to tackle the problem somewhere, the public sector was allowed to grow out of all sensible proportions. Keeping it that size just because it will cost some money, in the short term, to cut it its illogical.

And whilst we are on it lets drop the "paying tax and NI", who pays the gross wages... the taxpayer, so who actually pays for their tax and NI... yep you got it in one the taxpayer.

ukcarper

Mallotum_X wrote: »

You have to start to tackle the problem somewhere, the public sector was allowed to grow out of all sensible proportions. Keeping it that size just because it will cost some money, in the short term, to cut it its illogical.

And whilst we are on it lets drop the "paying tax and NI", who pays the gross wages... the taxpayer, so who actually pays for their tax and NI... yep you got it in one the taxpayer.

I'm not saying that waste in public sector doesn’t need to be tackled just that it is not a clear cut as some people make out. In the above case the net cost to taxpayer is similar and at least you get something out of a Liberian for example.

geneer

RUN_GHOULS_RUN wrote: »

in my area prices are up over 5% in a single month. i think i'll open another bottle of champers to celebrate the good news. :beer:

Can't be aberdeen then, where prices appear to have fallen 17.5% in a single month. :T

geneer

StevieJ wrote: »

You may be correct but my point was aimed at the poster celebrating jobs lost to enable falling house prices:eek:

Yawn.


Thats the bears for you. Kicking babies and punching kittens in the face.