Why do many people on here seem to think that rising house prices are good?

PosterBoy77

Given that these forums are all about money saving, how come so many people seem to feel that those who suggest that house prices could be due for a correction are doom mongers. No matter if house prices ever fall or not, why is the thought of prices going down seen as bad by so many people? Surely most people would be much better off if prices did at some point go down. Those who want to move into something bigger could do so at a lower extra cost, and first time buyers would also find it easier to afford somewhere.

ginger_nuts

if you bought it 10 years ago as I did then you could live with a price drop .but if you bought in the last few years then you could be into negative equity.You could fined it difficult to change lenders because you owe more then the house is worth .

roswell

Because over the last 5 years the value`s have grown faster than wages and thats not sustainable long term.

leftieM

I think a price drop will be related to an interest rate rise and that would be poo for everyone.

ukbondraider

mikael wrote:

Given that these forums are all about money saving, how come so many people seem to feel that those who suggest that house prices could be due for a correction are doom mongers. No matter if house prices ever fall or not, why is the thought of prices going down seen as bad by so many people? Surely most people would be much better off if prices did at some point go down. Those who want to move into something bigger could do so at a lower extra cost, and first time buyers would also find it easier to afford somewhere.

I dont think anyone actually thinks house prices rises are good on the whole well except those who have recently bought a house.

The problem on this site is that you get too many of the same boring arguments from the same people who year after year, interest rate rise after interest rise, any sniff of postable negative news after any sniff of postable negative news frequently trying to persuade the market to crash. As a result people refer to them as doom mongers because they have been blabbing the same old rubbish for the last 4/5 yrs.

Amongst the rubbish will be good info but because its so recurring it does get a little annoying.

I will bet during next week we will have 2 or 3 more House Price crash threads.

franklee

Al_Mac wrote:

Except for those with savings. Apparently there is more money saved that leant

Someone round here's gotta have some savings or won't this "money saving expert" site have been a bit of a flop?

Hands up who has savings and secretly wants interest rates to rise :T

ManAtHome

Well I think there are more savers than borrowers, not too sure about more money in savings than loans though - probably more money in savings and equities (including property equity) than loans and mortgages.

Go on then, I'll stick my hand up to having savings as well as a house (and a pension fund). Not too bothered about property ups or downs as I'll be "swapping" the house for another one when I retire (I've discounted the possibility of a very localised crash..). A bit of a rise in rates would be welcome after several years of relatively low rates (to real inflation). If they went up to 15% and I could get a few 10 year fixes I could live with the stock market crash.

Having taken the "eggs in many baskets" route, would have to be a global collapse of the financial sector to give me a big problem, but then I wouldn't be better or worse off than everyone else...

roswell

Ill hold my hands up and say I have savings, In investment terms i believe its called downside insurance eg your house price may go down with high interest rates but your savings will increase.

the problem is getting them both level for it to work 100%

Got one of those pension things to ManAtHome .. find it rather boring as im not old enough to use it :-)

ManAtHome

Pensions... pah! Maybe a better idea if you were paid out at 18, started work at 30, then just kept going until you dropped. I'm sure I was better at spending in my twenties than I will be in my sxities.

roswell

One of the older gents that used to work for me had a very good view on pensions, Pensions should be like a credit card we should get them at birth and use them to live our lives till we hit 55, at 55 we should attend work and pay all our money into paying off the debt.

Sounds good to me.

PosterBoy77

Al_Mac wrote:

Doom because your mortgage is more than your house

I'd be happy for a 25% correction

Even if your mortage is worth more than your house, is that alone a huge problem? People buy cars with loans where the outstanding debt can be more than what the car is worth. Many mortgage lenders are now allowing people to borrw 125% the value of their home, so it would still be possible to move even with negative equity.