80 per cent of homes bought since 2006 worth less than original price

geneer

http://www.metro.co.uk/money/867194-80-per-cent-of-homes-bought-since-2006-worth-less-than-original-price


Thats quite a headline.

<H1>80 per cent of homes bought since 2006 worth less than original price


The vast majority of people who have bought homes in the last five years find themselves trapped by plummeting prices.

About 3.5million, or 80 per cent of homes bought since 2006, have been classed as ‘underwater’ – or worth less than was originally paid.

Worse hit are people who bought when the housing market peaked between 2007 and 2008.

Some 93.2 per cent and 88.9 per cent respectively of homes bought during this period worth less today.

Those in the north east have seen the biggest slide.

The average price of property in the region for June this year was £149,364, almost £33,000 less than in 2006.
‘There is an unprecedented number of homeowners “stuck” with homes they bought in recent years with the expectation that prices would continue to sky-rocket,’ said Nicholas Leeming from property website Zoopla.

‘And as a result of not wanting to take a loss on their asset, many owners have been unwilling to set realistic asking prices to sell them.’ London has proved more resilient, with only 46 per cent of homes in the capital worth less now than in 2006.

‘In London, buy-to-let landlords continue to compete for the bricks and mortar that was historically first-time buyer territory and this has helped support prices lower down the property ladder,’ Mr Leeming added.

</H1>

FATBALLZ

It isn't reasonable to claim that the vast majority of people who bough a home since 2006 are now 'trapped'. Maybe they have lost a bit of money, but I'd imagine only a minority are in negative equity - and even being in negative equity doesn't necessarily mean you are 'trapped'.

sabretoothtigger

Seems fair enough to me. Housing costs money, its been of use in those 5 years and it cost something. Thats fair?


numbers
https://spreadsheets.google.com/spreadsheet/pub?hl=en_US&hl=en_US&key=0AoF8H3kYSfq-dEM3bVF4MFBFMDhTTS1HbGJyMXpSNXc&output=html

Cleaver

geneer wrote: »

The vast majority of people who have bought homes in the last five years find themselves trapped by plummeting prices.

About 3.5million, or 80 per cent of homes bought since 2006, have been classed as ‘underwater’ – or worth less than was originally paid.

You know, I'm sure some people do feel 'trapped' or 'underwater'. But it's not half emotive language to use.

We bought a house in 2009. We loved the place and bought it at a similar price to what our neighbour paid for a slightly smaller house in 2005 and got it for around £40,000 under the original asking price. Our deposit was around 35%, we borrowed around 1.5x our earnings and our mortgage payment makes up around 13% of our net pay and is now fixed at that for five years. As long as we stay in this area we'll stay in this house as we love it, so could be here for decades. We couldn't be more happy with our decision to buy this house.

However, I guess we fall in to the statistic in the article above as if you look at the indicies our house is probably worth less than we paid for it. But do we feel 'trapped by plummeting prices'? Erm, no. We knew when we bought our house that we were buying at an odd time, but I'm not sittng around for years and years trying to second guess the housing market. We can easily afford this house, we love it and we're here for the long term. So we're dead happy. Surely a huge percentage of the people who have bought since 2006 will feel the same? Most people don't let housing rule their life, it's just a means to an end.

warehouse

As soon as the word "plummeting" was used it was obvious it was just lazy journalism. Plummeting? LMAO.

BTW, we must be one of the 20% who's house has SKYROCKETED in value :rotfl:.

geneer

:rotfl::rotfl::rotfl:Yes, got forbid headlines use language like "plummenting" or "trapped".....or "rocketing" or "soaring" eh.

geneer

FATBALLZ wrote: »

It isn't reasonable to claim that the vast majority of people who bough a home since 2006 are now 'trapped'. Maybe they have lost a bit of money, but I'd imagine only a minority are in negative equity - and even being in negative equity doesn't necessarily mean you are 'trapped'.

Indeed. It just means that it will cost you money to sell your house.

Of course some might not be in negative equity. Just depends on what size of a deposit they put down.
Doesn't mean a pile of money hasn't been smoked by the crash though.

RenovationMan

Perhaps this is no bad thing if it makes people think about whether the house they are buying will suit them for more than just a couple of years. I remember a discussion with someone on the mortgage board who was considering buying a house for a couple of years and then moving on. I couldn't believe that someone would enter into such an huge purchase with such a devil may care attitude.

Cleaver

geneer wrote: »

Indeed. It just means that it will cost you money to sell your house.

Of course some might not be in negative equity. Just depends on what size of a deposit they put down.
Doesn't mean a pile of money hasn't been smoked by the crash though.

You do realise that the majority of people out there who have bought since 2006, like me, aren't really thinking along the same lines as you? The thought that I'm 'smoking money through the crash' is a really odd concept to me. I bought a house I could afford at a price I was happy with and will keep it for a long, long time. It's not like I'm sitting here depressed because my house is worth £10,000 or £20,000 less than I bought it for a couple of years ago.

LydiaJ

Cleaver wrote: »

You know, I'm sure some people do feel 'trapped' or 'underwater'. But it's not half emotive language to use.

We bought a house in 2009. We loved the place and bought it at a similar price to what our neighbour paid for a slightly smaller house in 2005 and got it for around £40,000 under the original asking price. Our deposit was around 35%, we borrowed around 1.5x our earnings and our mortgage payment makes up around 13% of our net pay and is now fixed at that for five years. As long as we stay in this area we'll stay in this house as we love it, so could be here for decades. We couldn't be more happy with our decision to buy this house.

However, I guess we fall in to the statistic in the article above as if you look at the indicies our house is probably worth less than we paid for it. But do we feel 'trapped by plummeting prices'? Erm, no. We knew when we bought our house that we were buying at an odd time, but I'm not sittng around for years and years trying to second guess the housing market. We can easily afford this house, we love it and we're here for the long term. So we're dead happy. Surely a huge percentage of the people who have bought since 2006 will feel the same? Most people don't let housing rule their life, it's just a means to an end.

This is the sort of post that I'd like to thank more than once.

My house may very likely have dropped in price since I bought it in January - or perhaps it has gone up a bit - I really don't care. I have a house that I love, in an area near my friends and my work, that will get my son into the school I want for him, and I have moved in plenty of time for his school application this coming autumn. I no longer have letting agents wanting to inspect every 4 months, and if I want to install solar panels and a decent shower and some extra insulation then I can. I can comfortably afford the payments, and they're going towards my own property rather than someone else's.

I'm here for the foreseeable future - perhaps I'll be like my parents who are still living in the first house they ever bought (52 years ago) and are only considering moving now because my mum really needs to be living somewhere with care support because looking after her is getting a bit too much for my dad.

There's a bloke at work who would like to move and can't because of falling prices, and I'm sorry for him and people like him, but I'm as happy to have bought my house when I did as Cleaver and Mrs Cleaver say they are to have bought theirs when they did.

ukcarper

If you rented for those five years and paid £500 a month you would have paid £30k in rent so I suppose you should include that in any calculations.