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

geneer

Batchy wrote: »

maybe the house valuation has gone down, maybe they have lost capital value but, I would have thought that the mortgage would also have gone down by a fair amount too, especially based on the fact most / or some, depending on where your coming from, have been over paying mortgages for the last 2 years due to record low mortgage rates due to low BOE base rates.

So instead of having 25 year mortgage they have probably already knocked a few years off it in total to date.

So, 22 years of paying RENT then you dont have to pay anymore.

We all know since 2006 rents have gone up around 20% (on average) PS, there are always exceptions, please dont highlight them.

The oft repeated assertion that "most" have been overpaying has of course been demonstrated to be bobbins.

Cleaver

geneer wrote: »

"The majority" you say. Are you a formal spokesperson. Have you taken a vote?

No, I haven't taken a vote. But it's fair to say that most people buy houses over the long term and most don't worry too much about small price fluctuations.

geneer wrote: »

Not "smoking money". Smoked. Burned. Up in flames. Gone. The cash is no more.

This reminds me a little bit of Deal or no Deal, where people make a deal with the banker for, say, £30,000 and then are completely gutted when they find out at the end that they had £50,000 in their box. They always look as if they made a massive mistake and have somehow 'lost' £20,000. What they actually did was make a decision based on the information they had in front on them, which is all you can do with the housing market as well.

Two years ago we decided that the time was right to buy a house but (and if you search my posting history you'll find this) we looked round loads of over priced, dissapointing houses. We were on the verge of giving up, then we came across one we loved and could get at a price a lot cheaper than we expected. We could easily afford it, so we bought it. We weren't to know what would happen with the housing market and we still don't. But there is no 'gone' money. The ticket price of the house was £xx,xxx and this means we pay £xxx per month on the mortgage. We have a plan as to when we want this mortgage fully paid off (2016) and want to live in the house for years and years.

At the end of the day we can all do calculation after calculation working out which is cheaper or more expensive, should I rent for four months, should I buy on a fixed, should I have waited until July. But you've got to do what feels right for your situation. And everyone's situation will be different.

All I was saying was that the article seemed to suggested that people were 'underwater' and are 'trapped'. I have no evidence has to how many, but there will be people like Lydia and myself who bought since 2006 who are fine. Not smug, not boasting that we got a deal, not boasting that the market will rise, not boasting that we'll make loads of money. Just people who bought a house for a price they were happy with and enjoy living in.

robmatic

geneer wrote: »

Not "smoking money". Smoked. Burned. Up in flames. Gone. The cash is no more.

I was merely pointing out that not being in NE does not mean selling wouldn't generate a loss.

Surely the same applies when you make any purchase? You exchange some of your precious cash for, say, an asset. Would you be reluctant to buy a car because you would have to spend money? In a few years' time it's certainly going to be worth less than the price you paid...

geneer wrote: »

And someone buying now would not be all that depressed that they're buying a house worth £10,000 or £20,000 less that they might have paid a couple of years ago.

...and?

I suspect most people will just buy what they can afford. And they would possibly have been able to get a bigger mortgage a few years ago, or a cheaper rate. Even if it was all that clear cut, hindsight may not be all that wonderfully illuminating.

RenovationMan

Quite how anyone thinks they can predict the market and buy at the bottom is beyond me. If they were such financial guru's then perhaps they should be making their fortunes on the trading floor?

Who's to say that someone buying in a few years won't wait until they are sure the bottom has been reached and end up buying for £10k or £20k more than they could have bought a year or so previously?

No one knows a market has reached the bottom until it starts going up the other side. Even if it does start going up the other side they don't know whether it's a dead cat bounce. They may have to wait anything upto 5 years before you can look back at historical prices and think, "Yes, 20xx was the year the market hit bottom. Shame I didn't buy then. Ho hum.'

Batchy

geneer wrote: »

The oft repeated assertion that "most" have been overpaying has of course been demonstrated to be bobbins.

What doesnt matter to me is whether they did over pay or didnt,

The fact thier mortgage would have gone from 600 pm to 300pm, and they decided to spend the extra 300pm elsewhere is whats important.

Its the reduction in required payment that is material as it effects them today. Not... when they sell...

If they didnt over pay, but didnt spend, then they are in a far stronger position... Lets just say 10k wiped off value of house over last two years, 2 bed terrace... hypotheitcally they could be 7k up in saved mortgage payments... much of a muchness really! Maybe they will continue to save that 7k, as rates are not looking to go up until aug 2012. maybe prices remain stagnant... still much of a muchness. In other words, does it matter.

You takes your chances, but at the end of the day if you dont you still need somewhere to live!

Percy1983

I have to say I haven't been holding off buying waiting for drops, just been clearing debts and then saving a deposit as it is in that time prices have dropped nicely around me which is a great feeling.

I will admit once I have a deposit together I will buy as soon as I can so I can continue in life, with that I certainly won't be overpaying for anything and will get the best deal I can.

Past that I just hope prices stabilise and stay with inflation really.

geneer

RenovationMan wrote: »

Quite how anyone thinks they can predict the market and buy at the bottom is beyond me. If they were such financial guru's then perhaps they should be making their fortunes on the trading floor?

Who's to say that someone buying in a few years won't wait until they are sure the bottom has been reached and end up buying for £10k or £20k more than they could have bought a year or so previously?

No one knows a market has reached the bottom until it starts going up the other side. Even if it does start going up the other side they don't know whether it's a dead cat bounce. They may have to wait anything upto 5 years before you can look back at historical prices and think, "Yes, 20xx was the year the market hit bottom. Shame I didn't buy then. Ho hum.'

I'd suggest that not buying near peak has been much more relevant ambition than buying at absolute bottom.

geneer

Cleaver wrote: »

No, I haven't taken a vote. But it's fair to say that most people buy houses over the long term and most don't worry too much about small price fluctuations.

If you haven't taken a vote, then its fair to guess or theorise.

One fair point though. Small price fluctuation are not particularly relevant.

A crash however is not a small price fluctuation.

Cleaver wrote: »

This reminds me a little bit of Deal or no Deal, where people make a deal with the banker for, say, £30,000 and then are completely gutted when they find out at the end that they had £50,000 in their box. They always look as if they made a massive mistake and have somehow 'lost' £20,000. What they actually did was make a decision based on the information they had in front on them, which is all you can do with the housing market as well.

Two years ago we decided that the time was right to buy a house but (and if you search my posting history you'll find this) we looked round loads of over priced, dissapointing houses. We were on the verge of giving up, then we came across one we loved and could get at a price a lot cheaper than we expected. We could easily afford it, so we bought it. We weren't to know what would happen with the housing market and we still don't. But there is no 'gone' money. The ticket price of the house was £xx,xxx and this means we pay £xxx per month on the mortgage. We have a plan as to when we want this mortgage fully paid off (2016) and want to live in the house for years and years.

At the end of the day we can all do calculation after calculation working out which is cheaper or more expensive, should I rent for four months, should I buy on a fixed, should I have waited until July. But you've got to do what feels right for your situation. And everyone's situation will be different.

All I was saying was that the article seemed to suggested that people were 'underwater' and are 'trapped'. I have no evidence has to how many, but there will be people like Lydia and myself who bought since 2006 who are fine. Not smug, not boasting that we got a deal, not boasting that the market will rise, not boasting that we'll make loads of money. Just people who bought a house for a price they were happy with and enjoy living in.

Thats nice for you.
And provided you can afford it, not neccesarily unreasonable.
Its a life stylechoice i suppose...which means its not for everyone.
Others may have different priorites.

diable

The only people who are trapped with plummeting prices are the ones in it to make a quick profit as the one who bought a home most probably don't care and are paying off their mortgages extra quick due to the low interest rates.

Cleaver

geneer wrote: »

Thats nice for you.
And provided you can afford it, not neccesarily unreasonable.
Its a life stylechoice i suppose...which means its not for everyone.
Others may have different priorites.

You sound a bit p*ssed off when you say "that's nice for you". Why does it seem to bother you that someone bought a house? And what's with the "not neccesarily unreasonable"? It's buying a home to live in, not speculating on a share. How is buying a house that you're happy with and can afford be something of a "lifestyle choice"?

Fully agree that people have different priorities, every one is unique. There is no good or bad time to be a house, it all depends on the situation of the buyer. In my opinion of course.