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

the_flying_pig

Rinoa wrote: »

Like most bears you're putting the cart before the horse.

On Tuesday's HUTH there was a very sound stone fronted terrace house in Burnley. In many parts of the SE it could easily sell for £300k. In Burnley ~ £19k. Developer bought it, spent £10k and it looked great.

The reason for the low price is too much supply in a town where there is little demand.

House prices won't come down until either fewer people want them or they build lots more in areas where they are needed.

And that's not going to happen anytime soon.

Great stuff but this thread [and your earleir posts that i commented on] are about whether falling prices is a good thing, not whether prices are going to fall. Not a particularly fine distinction IMO.

Rinoa

the_flying_pig wrote: »

Great stuff but this thread [and your earleir posts that i commented on] are about whether falling prices is a good thing, not whether prices are going to fall. Not a particularly fine distinction IMO.

That's why I suggested you're putting the cart before the horse. Not much point starting a debate about something extremely unlikely to happen.

Although I do notice more and more threads in this vein now that the market is stabilising. The bears have moved from 'house prices are going to crash' to 'the bulls are not nice people because they don't want prices to fall'

Graham_Devon

Rinoa wrote: »

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

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

How on earth can you say rising interest rates will now make much difference, as people paid them in 2007.

Yet a falling asset value, which makes no difference to anyone with at least 20% equity (which shouldn't be too hard considering the size of the boom we have just been through) IS a cause for concern.

It's not a cause for concern, it makes little difference. Makes no difference to monthly payments. No difference to monthly budgets. No real difference even if they want to move, as the house they move to will have fallen in value to, and if they are trading up, brilliant, the more expensive house you are trading up to now costs less in percentage than it did when your house was valued a bit higher.

All you seem capable of is to keep saying people have lost some of the value. Great.

However, this only really affects those that have bought recently nd now can't move, or remortgage easily, and also those who have remortgaged themselves up to the hilt.

For anyone else, who bought around 2006 or previous to that, it makes not a jot of difference. Only difference it makes is a mental difference of their self worth.

StevieJ

RenovationMan wrote: »

Falling interest rates mean people have more money to spend on other stuff. Even several grand off the purchase price of a house makes little difference to monthly repayments.

Yes, smaller deposits have more effect.

Losing_the_way

If you look at the German economy where they've seen a drop in housing cost over the last 10-15 years they are as a whole a lot better off than us. Our problem is that successive governments have pushed home ownership as the only housing solution whilst ensuring that private investments are sidelined. Brown's fiscal raping of the pension funds helped fuel HPI. Every day I encounter the phrase "my home is my pension" nowhere do these people ever stop to consider how they'll gain access to that equity. Frankly ten years ago the best advice for the individual saving for a pension was BTL, however the result of that is easy to see. If more had been done to create a level playing field in the personal investment field then a, housing would be cheaper and the b, the country as a whole would be wealthier.

Graham_Devon

Percy1983 wrote: »

As it is my parents are happy to see prices come down as it would help there 2 children in life.

Even if it dropped 50% they it would still be worth more than they paid for it so what difference does it make?

It was hard work with my parents. They own outright, no mortgage, ONLY due to the boom. They were able to sell up and move and buy outright, due to near 600% increase on previous family home in 10 years. (53k bought, sold 293k)

It's only recently I have been able to tell them, if they want to move up a little bit (which they do) they want house prices to fall as much as possible.

Dad got it pretty much straight away, but mum was hard to convince. All she could see is if the house went up in value she now had 210k instead of 200k. 210k buys more than 200k, right?

Trying to tell her the next house was now 250k instead of 230k and she now needed 40k cold hard cash instead of 30k cold hard cash for the move was frustrating to say the least.

Took a long time for her to see she's actually worse off if house prices rise. Didn't even get round to stamp duty and higher legal fee's every time prices rise.

Graham_Devon

StevieJ wrote: »

Yes, smaller deposits have more effect.

And what makes a smaller deposit?

Higher initial prices.

10k deposit is 5% of 200k.

10k deposit is 7.5% of 150k.

Therefore lower prices = larger deposit percentage = better rates.

Blacklight

The_Fox wrote: »

So then...

1. unemployment is going up

2. interest rates will soon be on the rise

3. Spending cuts soon to start kicking in

3. Some nasty worldwide events recently(will they have a negative effect around the globe?)

4. wage freeze

5. inflation well above target

6. consumer confidence low

7. Fuel prices rocketing

etc etc etc


So you open a newspaper, turn on the news and you fid out what the UK needs to help solve our problems

HIGHER HOUSE PRICES.

Now somebody please explain the logic to me of why house prices reducing in value is bad for a consumer that is being kicked in the teeth as it as. How can it in anyway give anyone any hope looking for a home one day knowing that work is becoming harder to find, prices are going up, and wages are lower, of course markets don't work like that as we are now finding out...

Some of this could be true for layabout council workers, but the private sector have been though this pain and are now emerging out of their own recession.

It's only news now because the BBC are facing these cuts, pay freeze and redundancy.

A lot of people are in for a pay increase at the end of this month and as prices have come down in real terms over the course of the last two years I expect that swarms of buyers will probably push prices up again by winter.

IveSeenTheLight

The_Fox wrote: »

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

I'm a homeowner, father and BTL LL to boot.
I do want my children to be able to afford decent housing.

That said, I can accept the criteria which drives the market as it does and try to position myself so that my family can benefit in the long run.

You should possibly consider the long term benefit than hope / moan / cpmlain about your short sighted vision of the future.

IveSeenTheLight

ILW wrote: »

Average house with two kids, both in their twenties. Would be better for all if houses were cheaper so they could both afford to move out and buy their own houses rather than having mum and dads place going up in value.

This is whwre it is very misleading to quote a figure saying 70% of people are homeowners.

What does that scenario do to demand?
Effectively 1 household now requiring three houses.
It increases demand.

Has supply matched that increase in demand over the years?
Could that contribute to sustaining house prices?

If you want prices to lower so that owner occupancy should increase to match lower average wages, you need a vast increase in supply