Land Registry -0.3% MoM, -2.6% YoY

joguest

ukcarper wrote: »

Are the people with little or no equity benefiting from those low interest rates though?

I thought everyone was on a 0.02% above base rate tracker. Sarcasm aside, those on fixed rates & SVRs are a product of their own decision making - they are responsible adults. The risks involved in buying a house include weighing up possible changes to personal circumstances, mortgage rates and house prices. Are you advocating a system that doesn't allow personal responsibility or one, perhaps, where more risk is borne by the lender?

Perhaps we should have non-recourse mortgages over here, in which case those getting repossessed wouldn't be liable for any outstanding shortfall from the fire-sale. Less risk of losing money through repossession, but greater risk of losing equity.

You see, it isn't possible for homeowners to have it their own way always. Ultimately they will be responsible for their decisions. The reason we have such low interest rates is because wage inflation is so low and there are so many deflationary pressures on the economy. Low wage inflation = low interest rates (turned out nice for debt-holders), but low wage inflation is clearly bad for debt-holders also (in fact high wage inflation/interest rates work out better for mortgage holders over the long-run).

joguest

ukcarper wrote: »

Can you explain how that would work if your house is now worth a £100k it would be worth £10k after fall. If you have 99% equity it means you owe £1k on house so after selling for £10k you will have £9k how is that going to buy you a 5x better house and that doesn’t account for lose on other house.

The loss on the other house doesn't matter as the rent more than covers the mortgage/maintenance. I'd buy the 5x better house with the magical substance of cash (although I'd probably limit it to a 2-3x better house as large houses are a huge drain on resources and I'd want to keep some cash).

ukcarper

joguest wrote: »

I thought everyone was on a 0.02% above base rate tracker. Sarcasm aside, those on fixed rates & SVRs are a product of their own decision making - they are responsible adults. The risks involved in buying a house include weighing up possible changes to personal circumstances, mortgage rates and house prices. Are you advocating a system that doesn't allow personal responsibility or one, perhaps, where more risk is borne by the lender?

Perhaps we should have non-recourse mortgages over here, in which case those getting repossessed wouldn't be liable for any outstanding shortfall from the fire-sale. Less risk of losing money through repossession, but greater risk of losing equity.

You see, it isn't possible for homeowners to have it their own way always. Ultimately they will be responsible for their decisions. The reason we have such low interest rates is because wage inflation is so low and there are so many deflationary pressures on the economy. Low wage inflation = low interest rates (turned out nice for debt-holders), but low wage inflation is clearly bad for debt-holders also (in fact high wage inflation/interest rates work out better for mortgage holders over the long-run).

I’m perfectly aware of the risks and benefits of house buying but wishing for fall just to help your position is no different to wanting rises to help your position. Prices will do whatever they do, but I personally would prefer to see house stagnate reducing in real terms as this would not impact to badly on both groups.

ukcarper

joguest wrote: »

The loss on the other house doesn't matter as the rent more than covers the mortgage/maintenance. I'd buy the 5x better house with the magical substance of cash (although I'd probably limit it to a 2-3x better house as large houses are a huge drain on resources and I'd want to keep some cash).

But where does that magical sum come from.

Really2

joguest wrote: »

The loss on the other house doesn't matter as the rent more than covers the mortgage/maintenance.

Would you not expect rents to fall around 90% if house prices did?

joguest

ukcarper wrote: »

But where does that magical sum come from.

er, our jobs

joguest

Really2 wrote: »

Would you not expect rents to fall around 90% if house prices did?

No. Rents have been static in real terms for the last three decades, whereas house prices rose insanely in the decade leading up to 2007 - yields dropped by over 50%. A significant fall in house prices is unlikely to lead to much of a fall in rents.

Really2

joguest wrote: »

No. Rents have been static in real terms for the last three decades, whereas house prices rose insanely in the decade leading up to 2007 - yields dropped by over 50%. A significant fall in house prices is unlikely to lead to much of a fall in rents.

So you think if house prices fell 90% rents would not fall much!!!:eek:

Even funnier is you expect to still both have jobs if house prices fell 90%

That would be back to 1978 prices.

In reality if house prices fell 90%, your 99% equity and 60% equity would mean you would be in NE and stuffed like practically all other owners. Your NE around 30% on house 2.

What you would be buying with a net equity on 2 houses of around -120%? (providing houses were of similar value)

PS why look at rents over 3 decades and house prices over one? don't you do like for like measurements?

I think you are now as the bears say "a greedy buy to-let, debt junkie slumlord"

ukcarper

joguest wrote: »

No. Rents have been static in real terms for the last three decades, whereas house prices rose insanely in the decade leading up to 2007 - yields dropped by over 50%. A significant fall in house prices is unlikely to lead to much of a fall in rents.

So you got a house worth £100k it drops to £10k you are covering say a 5% mortgage on the 40% you own rent £166 a month. Mortgage on house £10k at 5% = £59 a month over 25 years or at 10% £92 a month I’m sure you will get lots of takers.

joguest

Really2 wrote: »

So you think if house prices fell 90% rents would not fall much!!!:eek:

Even funnier is you expect to still both have jobs if house prices fell 90%

That would be back to 1978 prices.

In reality if house prices fell 90%, your 99% equity and 60% equity would mean you would be in NE and stuffed like practically all other owners. Your NE around 30% on house 2.

What you would be buying with a net equity on 2 houses of around -120%?

The only thing better than presenting a straw man argument is to field an antire field of straw men, it seems.

1. The 90% thing was related to a specific argument, in which I would be able to withstand a 90% fall in prices and still be able to buy a much better house. I didn't say I was expecting prices to fall 90%.

2. Why would house price falls lead to job losses? Have you got any evidence or reasoning for this strange assertion?

3. I've just demonstrated that rental yields go up and down with house price booms/busts (the nationwide usually put this data in their press release every month - you'd do well to have a look) whilst rents stay the say. So why the funny blue creature? Are you actually capable of engaging in reasoned debate?

4. "Your NE around 30% on house 2." As I said - the mortgage more than covers the repayments and maintenance - did you not read that bit? Also, the minimum payment is around 2% of our net income. It doesn't matter if we're in NE on that house as the payments are next to nothing compared to our income - and any NE wouldn't last long.