House prices: inflation wipes thousands off property values - YAY BULLS WIN!

geneer

Rinoa wrote: »

17% inflation eh?

So, someone who has say, a £200k mortgage, has had their balance reduced by 17% in real terms.

Great news for borrowers. :rotfl::rotfl::rotfl:

It also means they're 17% cheaper for those who chose to buy after the crash. Double bubble.

Oh, and as we all know a spanking good deposit saves a fair bit of cash too. Triple ripple.

julieq

Geneer, do you actually read the articles you post?

Inflation 17% over period in question, OK, let's take that on trust.

Nominal prices up 11% over the same period.

Reduction in value is not 17%, is it? Even with a correction factored in.

And with salary growth at 15% and interest rates at historic lows, the "loss" is massively offset by the effects of inflation on the loan itself and the reduction in payments.

Meanwhile rents are going up.

If your strategy is so great, why not just enjoy the fruits of living with your mum? You'll never have the balls to actually buy somewhere anyway.

ukcarper

LydiaJ wrote: »

As well as the considerations already pointed out by other posters, the article is also ignoring the fact that this hypothetical person who has "lost" £42,500 since 2006 has been able to live in the house for five years without paying rent on it.

Houses that sell in Manchester for about £210k now seem to rent for about £675 peer month £40,500 since 2006.

LydiaJ

Oh indeed. I'm not saying that the "live in it" aspect will necessarily cover the whole of the "loss" in all cases. Just that the analysis is incomplete without considering both the rent saved and the interest incurred. The whole thing is sloppy journalism.

ukcarper

LydiaJ wrote: »

Oh indeed. I'm not saying that the "live in it" aspect will necessarily cover the whole of the "loss" in all cases. Just that the analysis is incomplete without considering both the rent saved and the interest incurred. The whole thing is sloppy journalism.

Yea you wonder why they used £250k in northwest when average house price in 2006 in the northwest was half that.

mcc100

Sibley wrote: »

At the end of the day I dont really care about prices

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

geneer

LydiaJ wrote: »

As well as the considerations already pointed out by other posters, the article is also ignoring the fact that this hypothetical person who has "lost" £42,500 since 2006 has been able to live in the house for five years without paying rent on it.

And someone renting for 5 years has been able to save up a tasty deposit (and we know that deposit points make prizes) and has seen house prices plummet since 2008.

This renting vs buying chat has become a debating ghetto. A dull bullish fall back position with little bearing in reality.

Mortgages last 25 years. 0.5% base rates will not.
Deposits take time to save.
The renters on this board do not intend to rent forever.

geneer

julieq wrote: »

Geneer, do you actually read the articles you post?

Inflation 17% over period in question, OK, let's take that on trust.

Nominal prices up 11% over the same period.

Reduction in value is not 17%, is it? Even with a correction factored in.

And with salary growth at 15% and interest rates at historic lows, the "loss" is massively offset by the effects of inflation on the loan itself and the reduction in payments.

Meanwhile rents are going up.

You forget JulieQ that real price falls benefit those who intent to buy as well as those who have already bought.

Of course the real fun begins when we start making comparisons between the start of 2008 and now, doesn't it.
As the article says.."rampant inflation means that most people who bought a property after 2006"

I know you guys like to connect arbitrary convenient points on a time line and pretend they are meaningful.
But the real world doesn't work like that.

Hey, here is the really interesting bit.

The toxic combination of rising inflation and falling or static house prices is set to continue for some time to come, with economic forecasters now expecting interest rates to remain low, encouraging inflation. The situation will further erode Britain's housing wealth

Good news for future FTBS I think.

julieq wrote: »

If your strategy is so great, why not just enjoy the fruits of living with your mum? You'll never have the balls to actually buy somewhere anyway.

:rotfl: JulieQ >>>>>>>>Dummy

geneer

From the comments section.

Regional variations don't back this up nationally. i bought my house in 2004, just sold, and have made a loss of 50% on the value. Not quite what I had hoped for, when I invested in my "pension" home back then.

Aberdeenangarse

geneer wrote: »

Mortgages last 25 years. 0.5% base rates will not.
Deposits take time to save.
The renters on this board do not intend to rent forever.

Well they seem to have on HPC. I wonder how much rent they've paid in the last 10 years?