anyone else want a CRASH...?

CB1979_2

tomstickland wrote:

However you want. I'd choose to define it as meaning that a single person in their late 20s could afford a 1 bed flat and a couple could afford a 2 bed house.

damnit clicked on thanks rather than quote! doh

but just because YOU can't (I'm assuming) doesn't mean that other single's in their late 20's can't.

I know loads of people who in their mid-late 20's own property.

5 years ago I bought a place in Stoke for £22k a big 3 storey 4 bedroom end terrace, the equivalent property in South Croydon was £180k then. so which is undervalued, which is overvalued and which is spot on?

roswell

I agree CB1979, if i was selling then every id got for option b And with Hindsight I would sell 2 days before any crash but i dont have those skills.

personnaly Im taking advantage of not having a huge mortgage by luck more than anything of buying before the boom and not using my property as a cash machine. I see my property as a very long term commitment but just the same im doing my best to pay off the debt and thus allow me to get another mortgage in the future, ideally this will be after a dip / crash / catastrophy in the market. For now im battening down the hatches and waiting for the storm.

Alan_M_2

tomstickland wrote:

However you want. I'd choose to define it as meaning that a single person in their late 20s could afford a 1 bed flat and a couple could afford a 2 bed house.

Thats not an unreasonable definition, but the problem occurs with the definition of affordable.

Lets say things continue on the path they have been (and some people actually think it will), and the only way for a 20 year old to get into a 1 bed flat would be to take out a X10 multiple salary over 50 years, if the lenders choose to offer this then technically it's affordable. Is it ethical or moral? We'd need to start another thread to discuss that

Alan_M_2

CB1979 wrote:

damnit clicked on thanks rather than quote! doh

but just because YOU can't (I'm assuming) doesn't mean that other single's in their late 20's can't.

I know loads of people who in their mid-late 20's own property.

5 years ago I bought a place in Stoke for £22k a big 3 storey 4 bedroom end terrace, the equivalent property in South Croydon was £180k then. so which is undervalued, which is overvalued and which is spot on?

Actually Tom has stated a couple of times in this very thread He's an owner, see my answer to his post above on the values of affordability, they are purely subjective and unlike valuing lets say, a business, which will have a quantifiable value based on cash assest and turnover.

Any property is worth what the lenders are willing to lend on it, if someone can borrow eough to buy it, it will sell for that amount, trying to value any property in the same way a business is valued would be a real eye opener for some people.

Xbigman

Snow_Dog wrote:

Hmmm, well I reckon every late 20's bloke ought to be able to afford a 50 foot luxury cruiser and a ferrari but lifes never a bed of roses;)

But then if everyone drove a Ferrari there would be no status in owning one.
Regards



X

Xbigman

Just a note, EA's don't give your property a fair valuation, they give it the maximum valuation. Its EA's that are as guilty as anyone else of market stoking.

I also like it when EA's start talking about how the housing market is 'challenging' every now and again. As their charges are percentage based, shouldn't they be rolling in it with all these high prices? I realise sales volumes are a factor, but the volumes are there as well.
Regards



X

tomstickland

Snow_Dog wrote:

Hmmm, well I reckon every late 20's bloke ought to be able to afford a 50 foot luxury cruiser and a ferrari but lifes never a bed of roses;)

I wouldn't see every late 20s bloke affording a Ferrari as "normal" or "reasonable", but I would see someone in their late 20s as being able to afford a small flat as a "reasonable" expectation.

but just because YOU can't (I'm assuming) doesn't mean that other single's in their late 20's can't.

I bought 6 months ago and it's easily affordable for me. That doesn't change my definition though. I'm 33 too!

Hereward

roswell wrote:

Ok quick question were technology shares over valued in 2000 ? simply answer is yes, did it stop every FA advising everyone they could lay there hands on to put money in tech shares ?? NO. did it all go wrong in 2001 ??

No, Tech stock prices were deemed to be too low in 2000, hence lots of people bought them in the belief that they will rise in price. This belief was coupled with the belief that the new economy will be technology (and internet) based, so buying shares in tech companies while they are "cheap" was seen as a good thing. In 2001, the early buyers of Tech shares, and the original owners, decided that they had made a good profit from the shares and decided to sell some of them. This then flooded the market with shares, which the amateur investors took to mean a weakness in the company and decided to offload their shares. This selling of shares creating a perpetual cycle and many people lost money as they could only sell the shares for less than what they were bought for. In addition to this panic selling, many investors discovered that the companies they had invested in were based on an idea and had no real assets to back the value up, which made the companies worthless.

RHemmings

lynzpower wrote:

if theres a crash- the person selling might end up in negative equity and might not be able to sell

if theres a crash, people may well lose thier jobs- meaning less buyers

If theres a crash, interest rates likely to rise more, so dont bet on affordability

Lots of good reasons why a crash isnt a brilliant thing for britain at large, but market in some areas looks somewhat stagnant.

loads of crash threads around at the mo- look about

But in the 1990s houses rapidly became affordable again. If that's the effect of a crash I say bring it on.

In my opinion, a crash would cause some short term pain, but be very good for the country as a whole. If people keep on buying houses at the current prices, then they'll be saddled with such huge mortgages that they'll have much less money to spend on other things. Result - people lose their jobs, businesses go under, and we get a recession anyway.

abaxas

RHemmings wrote:

But in the 1990s houses rapidly became affordable again. If that's the effect of a crash I say bring it on.

In my opinion, a crash would cause some short term pain, but be very good for the country as a whole. If people keep on buying houses at the current prices, then they'll be saddled with such huge mortgages that they'll have much less money to spend on other things. Result - people lose their jobs, businesses go under, and we get a recession anyway.

Exactly!

Someone else who thinks long term. Capitalism requires boom-bust cycles to operate. We need a crash to shake out the dead wood then go back to making money.

We'll all be richer (in the long term) by having one.

BRING IT ON.