Why as a homeowner trading up are property rises good for me

whatawaste_2

Can someone please try and explain to me why as a homeowner who is now looking to trade up why property prices falling would not be a good thing for me.....

In 2003 we purchased our first and present property with my then lovely partner, who still is lovely by the way.:)
During the last eight years we have not really given a hoot how much in value our property has gone up and down. We have kept a very casual eye on prices, but on the whole we have just enjoyed eight wonderfull years being together in our place.

We are now ready to move to somewhere bigger, in the not too distant future we are looking to have a child/children. Now, on paper we have made money/equity on our property which we of course will be using in our next purchase, i do not want to get into an argument if i have or have not REALLY made money yet, of course it's not a done deal to the place is sold.

My argument is that surely prices falling now would be a good thing for me. Yes i have made money on the present property, but the next house we are looking at is much more expensive, i have worked out that is prices were to fall 20% we would be saving £10,000's.

I have had this argument with family and friends, and for the life of me i cannot see the logic of their argument that prices rising would be a good thing in my situation. The only thing i gave into partially was that my equity in my present property could have been the deposit in the next home, but in our case it's not relevent as we have a 27% deposit already and without the sale of our house.

can someone enlighten my:)

Le_Chuck

you're right, they're stupid

Graham_Devon

whatawaste wrote: »

Can someone please try and explain to me why as a homeowner who is now looking to trade up why property prices falling would not be a good thing for me.....

A liar will be able to explain this for you

the_flying_pig

it's impossible.

falling prices would be good for you, obviously.

to be honest anyone with a three-digit IQ who's committed more than a few moments' thought to the question would agree.

why do you even need to verify this? has someone suggested otherwise?

The_Fox_3

Why are you even asking this question!!

Apart from "Property speculators", and those with low self esteem problems high house price inflation is bad for everyone.

Generali

whatawaste wrote: »

Can someone please try and explain to me why as a homeowner who is now looking to trade up why property prices falling would not be a good thing for me.....

In 2003 we purchased our first and present property with my then lovely partner, who still is lovely by the way.:)
During the last eight years we have not really given a hoot how much in value our property has gone up and down. We have kept a very casual eye on prices, but on the whole we have just enjoyed eight wonderfull years being together in our place.

We are now ready to move to somewhere bigger, in the not too distant future we are looking to have a child/children. Now, on paper we have made money/equity on our property which we of course will be using in our next purchase, i do not want to get into an argument if i have or have not REALLY made money yet, of course it's not a done deal to the place is sold.

My argument is that surely prices falling now would be a good thing for me. Yes i have made money on the present property, but the next house we are looking at is much more expensive, i have worked out that is prices were to fall 20% we would be saving £10,000's.

I have had this argument with family and friends, and for the life of me i cannot see the logic of their argument that prices rising would be a good thing in my situation. The only thing i gave into partially was that my equity in my present property could have been the deposit in the next home, but in our case it's not relevent as we have a 27% deposit already and without the sale of our house.

can someone enlighten my:)

House prices falling from where you are now would improve your lot. If house prices had started falling from when you bought you would have seen the equity from your deposit disappear (if you had one) and then been in negative equity and unable to move as if you sold you wouldn't have been able to clear the mortgage.

treliac

whatawaste wrote: »

Can someone please try and explain to me why as a homeowner who is now looking to trade up why property prices falling would not be a good thing for me.....

You're absolutely right, of course, and have answered your own question.

Ignore those who harp on, promoting high prices. The people who want high house prices are those who buy houses as investments only, or those who will not want to trade up to anything more expensive, or those whose next move will be to downsize. But not those looking to move upwards.

As prices increase they rise in proportion. So the gap between a cheaper and a more expensive house increases, meaning you need to find more money to trade up and that house you were hoping to buy may become unattainable!

Good luck with your plans.

boo1

I agree with all of the above, it's all relative, you may lose a little on yours but will gain much more on the next purchase if prices fall.

HAMISH_MCTAVISH

treliac wrote: »

Ignore those who harp on, promoting high prices. The people who want high house prices are those who buy houses as investments only, or those who will not want to trade up to anything more expensive, or those whose next move will be to downsize. But not those looking to move upwards.

And those in negative equity, and anyone looking to upsize to only a moderately more expensive place with equity of less than 40% where they won't get a new mortgage at comparable rates, and anyone looking to take a sideways step with less than 40% equity and a non-portable mortgage, and anyone whose next move will be to leave an inheritance, etc, etc, etc.

As prices increase they rise in proportion. So the gap between a cheaper and a more expensive house increases

False.

In the crash, the price of typical FTB properties fell significantly more than the price of typical 2TB properties.

The gap actually widened, instead of narrowing.

And in the recovery since early 2009, the price of FTB properties has actually risen more than 2TB properties, as julieq keeps pointing out.

So the gap has actually narrowed with rising prices.

Now granted, if you're looking to move from a 500K property to a 900K property, these things are irrelevant. But for the majority of FTB properties, people looking to move to the next step were disadvantaged by the crash, and have been helped by the recovery.

chucky

whatawaste wrote: »

can someone enlighten my:)

only an idiot would tell you not to buy something now instead of buying it in 10 years time when it is more expensive. we have lots of those around here.

The_Fox_3

HAMISH_MCTAVISH wrote: »

And those in negative equity, and anyone looking to upsize to only a moderately more expensive place with equity of less than 40% where they won't get a new mortgage at comparable rates, and anyone looking to take a sideways step with less than 40% equity and a non-portable mortgage, and anyone whose next move will be to leave an inheritance, etc, etc, etc.



False.

In the crash, the price of typical FTB properties fell significantly more than the price of typical 2TB properties.

The gap actually widened, instead of narrowing.

And in the recovery since early 2009, the price of FTB properties has actually risen more than 2TB properties, as julieq keeps pointing out.

So the gap has actually narrowed with rising prices.

Now granted, if you're looking to move from a 500K property to a 900K property, these things are irrelevant. But for the majority of FTB properties, people looking to move to the next step were disadvantaged by the crash, and have been helped by the recovery.

Sorry!!

I am sure it's not you Hamish, but i do not understand anything you have said, and now read it for the fourth time.
I do understand that those in negative equity are not able to get the mortgages to move, and i realise such as the way the property market is rigged that many need house price inflation in order to get a deposit, perverse but thats the property market for you.

But even those that do go into negative equity for example, IF they wre to get mortgages then it would be better for them to have a property crash as the costs would be far cheaper.

Am i missing something here