Boom - bust - boom When didn't it ?

titewad_2

frugal_dougal wrote:

Oh well, I guess that as there's been 75 views and only one reply (thanks dougk) the answer must be a resounding NO.

I am hoping that there will be a very gentle but steady rise in house prices for evermore, which will allow for the FTB's wages to catch up so that they can get on the ladder. This is really what Gordon Brown is trying to achieve.

Alternating between boom and bust is no good despite the fact that some people do very well out of it.

I don't mean to be rude dougal but you're having a laugh aren't you!!!
In my part of the country house prices have almost trebled in the last three to four years.My pay rise for the last three years has been £4 a week..How am I gonna catch up with house prices?.My wage is around 17.5k,actually not bad for my area,but in relationship to house prices.....that incidentally are bucking the national trend and still rising.....Not exactly going to catch up are they!

jazzyjustlaw

If it goes up then it has to come down. My husband and I have a decent income and we cannot buy a property. If there are no first-time buyers surely that will affect the market. I remember learning economics at uni and am sure the market went in peaks and troughs. I need a deep trough!

deemy2004

jazzyjustlaw wrote:

If it goes up then it has to come down. My husband and I have a decent income and we cannot buy a property. If there are no first-time buyers surely that will affect the market. I remember learning economics at uni and am sure the market went in peaks and troughs. I need a deep trough!

The problem is during the troughs credit is tight !
As obviously at that point the housing market would be viewed as high risk and the lenders more strict in their lending criteria

nelly_2

1st time buyers are at a 20 year low,as Titewad said its mainly because house prices have massively overtaken wages and that is simply not going to carry on. IT CAN NOT!

I just found a house that I thought was ok price wise but I've pulled back out and deceided to go to Egypt for a week.

And anyway this time next month the house will have dropped the price of the holiday.

bridiej

nelly wrote:

I hope they drop just to upset all the tight !!!!!! who think they can make money by doing nothing other than sit on their tight !!!!!! instead of working. If you want to make money go out and work weekends, thats what I do

My husband and I both work seven days a week at the moment but I still hope they dont drop too much as we may be looking to sell in the not too distant future!

I dont think it's fair to assume that all home owners just sit around laughing at the increased equity they have - most of us have worked hard and made huge sacrifices to get on the proprety ladder.

Plasticman

bridiej wrote:

My husband and I both work seven days a week at the moment but I still hope they dont drop too much as we may be looking to sell in the not too distant future!

I dont think it's fair to assume that all home owners just sit around laughing at the increased equity they have - most of us have worked hard and made huge sacrifices to get on the proprety ladder.

I think that nelly was referring to buy to let investors etc rather than all home owners. The growth in buy to let has added to the huge growth in house prices, but I must admit - I wish I had done it when I could have afforded it! I'll just have to keep going out and working weekends instead.

VH

If people want to make money out of buy to let and also by jumping up the property ladder then why shouldn't they?

Far better than working 7 days a week!

nelly_2

I'll tell you why they shouldnt.

The one and only reason why the intrest rates were increased was to subdue the house price inflation. But higher intrest rates are crucifying manufacturing, which is already in the worse state it has ever been in our history.

Its stoping people from moving house, not just ftbs but everyone. The amount of work I have done in the last few years (plastering) is extensions and conservatories and nearly all of them said they were going to move but can not afford too so they extended instead.

And at the end of every boom there is a bust causeing misery.

Stability is the key to long term well being of a country not massive fluctuations.

I personally think house prices should be locked to inflation somehow, it would help prevent over borrowing and also negative equity.

VH

Interest rates weren’t raised only to slow down house price inflation. The Bank Of England don’t make decisions based on a single factor. One of the major reasons was to control the massive amount of debt people were running up due to all the low interest rates on loans and credit in general.

Although stability is a nice idea in theory, it will never happen. So you may as well take advantage of the markets when the conditions are right.

If you keep on raising interest rates, then as happened in the 90s, you will just end up with a lot of people without homes.

dougk_2

As VH says

High interest rates will mean lots of people without homes and also no buyers as rates are to high allowing them to borrow.

If as an FTB you are not buying now as you think prices are going to drop then you should be saving every penny and cutting back so you can buy when they have!