Stuck on Interest Only but want to move forward?!

marblesfound

Hi,

I'm not trying to be clever or judgemental here but this shows what is wrong with the property market - people still believe it is more likely to go up than down.

We have the world drowning in debt; the Euro is close to collapse and UK govt debt is at ridiculous levels with a possible recession on the way. I suspect that the only thing keeping the property market afloat is indeed buy to let -along with record low interest rates of course. Everyone seems to believe that if they wait a few years (long term?) then prices are bound to rise. I believe they have to rise at some point but what if that point is beyond most people's idea of long term? What if it is not for another 20 years+? If events continue the way they are then it is only a matter of time before people start to realise that in a debt deleveraging scenario property is most certainly not a one way bet - that is a pretty scary scenario considering herd behaviour and the number of people who have a strong belief that property prices will not fall for any sustained period.

The way I look at it is this - you both want to get on with your lives and the real risk is to the downside. Yes prices could thoretically rise but obviously you could cope with that. The real worry is that prices fall. If prices fall and/or interest rates rise then you really are bu**ered. You have had some good advice. I can think of one other option - a £7k loan each to get rid of the property now and know that that is all you have to pay. Yes - prices could go up and then you would kick yourselves but the situation as I see it is that you really cannot afford for prices to go further down. If you have to sell best not to attempt to do so when everyone else is trying to do the same thing in a falling market. Of course without a crystal ball I have no idea what will happen from here and I do not pretend to - I just think you should consider the scenario where prices fall further. It is just another option for you to consider.

I genuinely wish you all the very best.