Most are finding life far worse, so what do we need, higher house prices!!

The_Fox_3

DervProf wrote: »

Apart from a few HPI worshipers on this forum, you might find that more people than you think would not be too fussed about lower house prices. In fact, many parents (who are already homeowners) might welcome lower prices.

I agree, those homeowners who love their kids want their hard working children in decent afforadable housing.

You will find that most of the uber bulls on this board are childless cold me me me types

DervProf

The_Fox wrote: »

Please don't come out with "it makes the homeowner more confident", because that is a problem in my eyes not a plus.

Indeed.

I have witnessed myself the over confidence that comes with HPI. While you're still living in your HPI'd house, all it does is give you more borrowing power (and something to boast about).

I was recently doing a job for a client who "boomed" during the recent boom years. New car, designer clothes for the kids, big TV(s) etc. He'd moved from a modest home to something a but larger. It wasn't the increase in mortgage that has landed him in the do-do, it wass a combination of over-spending as he watched his house value increase, and the end of the boom which has left him with less work than he thought he was going to have.

Rinoa

The_Fox wrote: »

Do you guys honestly believe(and i am sure you don't) that there is anything but harder times this year for most people, can't some of you even be honest with yourselves.

Times will be even harder if house values fall 20/30%.

We need growth. Falling house prices will not help acheive that.

DervProf

The_Fox wrote: »

You will find that most of the uber bulls on this board are childless cold me me me types

I have no children, but I have good friends who have. However, I have one friend who was revelling in HPI even though her grown-up kids have very little chance of buying their own place.

It's my ability to think a little beyond my own personal gain, that makes me a childless homowner who doesn't welcome HPI (not high HPI anyway). I was "priced out" by the late 80's/early 90's boom, and I know how it feels to see home ownership get further away. Luckily we had a crash, and that gave me the chance to buy my own place. Yes, there were losers in that crash, and probably a few innocent ones - but it might have taught a lesson to the "isn't it great how my house is worth 23% more than a year ago" brigade.

purch

Totally irrelevant.

They'll still lose the value of their home if prices fall whether it's mortgaged or not.

If you own the property outright, then the actual "value" of the property should be irrelevant.

The fact that to many homeowners it is not, is probably one of the root causes of many of the problems currently being faced.

DervProf

Rinoa wrote: »

Totally irrelevant.

They'll still lose the value of their home if prices fall whether it's mortgaged or not.

They'll still be sheltered by it, as long as they keep up repayments. If they end up paying more for it than the next purchaser, tough - that's a free market for you. Of course, it is very unlikely that once payed for, they'd be able to buy the same type of property for less than they payed for it 25 years ago, so what's the problem ?

DervProf

purch wrote: »

If you own the property outright, then the actual "value" of the property should be irrelevant.

The fact that to many homeowners it is not, is probably one of the root causes of many of the problems currently being faced.

And that's where pressure should be put on banks, in the event of negative equity, the banks should be made to not penalise those who are in NE. NE is more a state of mind than any real financial problem, or it should be.

People buy cars with a loan, and soon the value of the car is less than amount outstanding on the loan - so why the big taboo about NE in the property market ? I tell you why, it's all part of the "property only goes up in value" mindset that has been ingrained into the UK public's heads.

PasturesNew

Rinoa wrote: »

70% of consumers own their own homes.

You really think they would be happier if their home lost 20/30% of its value?

It's a price tag, not a value.
And for those that own their own homes, they probably bought it for 10-30% of that price tag. So it doesn't matter.

PasturesNew

Rinoa wrote: »

Times will be even harder if house values fall 20/30%.

We need growth. Falling house prices will not help acheive that.

Falling house prices mean people have more money to spend on other stuff.... creating jobs.

CloudCuckooLand

Rinoa wrote: »

We need growth. Falling house prices will not help acheive that.

All the more reason that we should have taken the hit on HPI during the recession, instead of trying to prop things up.

Then we would now be, from a lower base, seeing better growth...

Instead of which they made the deficit bigger to deal with...and we now have to dent growth harder, and at the wrong time...

Better to rebalance the economy than just repeat the mistakes of the noughties in thinking of houses at cash machines ?