House price predictions

albacore1854

As well as rising interest rates don't forget,

Rising council tax, rising company car tax, rising energy bills, rising grocery costs, rising fuel costs,

Now there's a piece of work if you've got time on your hands.

How much extra is the cost of living for Mr Average in 2007/8, than when interest rates were 3.5%.

I'm unsure on wage rises, there seems to be positive movement, yet few where I work, or my mates have had anything worth speaking of for a year or two.Wondering if the City money skews it.

Alan_M_2

fivemice wrote:

As a potential ftb, I must say its very frustrating to know what to do, whether we should hold off or just go for it. I think we will go for it though, we intend to buy a house that we will live in for the next 15 or so years at least, who knows what could happen by then.

Luckily we will be in a position in three years time to be able to afford 21% interest on a 15yr mortgage so I'm not too worried about rate rises, but my friends bought a house about three years ago at the top end of their budget and are always moaning that they are broke so they must be close to breaking point already which is very worrying.

If you really can afford a 15 year term at 21%, why aren't you simply buying cash in full? The sums that the rates/term suggests you must have a very large income, seems like a waste of time getting a mortgage.

Unless of course you're buying one of the fabled £30K houses in Grimsby that are mentioned on this forum every now and again.

Some basic calculations on a repayment mortgage would be £1850 per month for each £100,000 borrowed.

devils_advocate

Even the most naive economist will tell you that there is no direct correlation between interest rates and house prices, to the exclusion of all other factors.

Thus, I would surmise, if these mysterious other factors are positive, house prices will rise, and if they're negative, house prices will fall. If the factors are strongly positive, prices will rise a lot, and ........ (you get my drift).

Economists in the city get paid silly sums of money (enough to not need to borrow money for their K&C mansions) to try to say what these other factors are, and what proportional influence they have.

krazykidskate

In my opinion the housing market rise is being fuelled by the Buy To Let buyers. I would love to know the percentage of first time buyer homes that were snapped up by BTL's rather that first time buyers! It doesn't matter that the house prices are out of reach of the first time buyers in 90% of places - its not them that are buying them! And because the first time buyers can't afford to get on the ladder and have to rent this creates more business for the Buy to Let's. The interest rate rise won't affect the BTLs they will just put up the rent and pass on the burden to the tenant in the form of a rent increase. So the house prices will keep rising unless the government intervene by putting a cap on the number of BTLs people can have or some other tax penalty but this is probably not in their interest.

How many apartments are sat empty owned by BTL's as an investment whilst would be first time buyers can't afford their first home?

tkane

Property prices will CRASH within the next five years, there's no doubt about it now.

Carter_2

tkane wrote:

Property prices will CRASH within the next five years, there's no doubt about it now.

Quite a confident prediction! So do you know how much (% wise) they will fall by seeing as you have your crystal ball to hand there?

fivemice

Alan M - because it will be three years before we are at that point, and then we'd have to save up the full cash price. And no, it's not a £30k house in Grimsby. You know you can come across as quite rude in your posts, as though others are completely stupid. We don't have a very large income, just very low outgoings.

tkane - go on then, show us the evidence

mr.broderick

fivemice wrote:

Alan M - because it will be three years before we are at that point, and then we'd have to save up the full cash price. And no, it's not a £30k house in Grimsby. You know you can come across as quite rude in your posts, as though others are completely stupid. We don't have a very large income, just very low outgoings.

tkane - go on then, show us the evidence

Alan m isnt rude, he is an extremely educated experienced and valued member of this forum, he is just probably losing his patience with a few of the threads appearing on here, i know i am..

mr.broderick

tkane wrote:

Property prices will CRASH within the next five years, there's no doubt about it now.

Just shut up unless you have evidence to corroborate your statements.

fivemice

Ok, I apologise. I just found it completely unnecessary for him to make judgements on my situation based on one sentence that he hadn't even read properly.

What does my making sure I have enough to accomodate a large interest rate rise have to do with the multiple posts with people suggesting houses in Grimsby? Nothing.

Whilst I truly appreciate the wisdom of people "in the know", others have to understand that there will indeed be newbies on the board, who are just as entitled to their opinion as everybody else.