What happens to property bears when they buy?

jay213

RenovationMan wrote: »

I'm also not fussed if they never go up, I have proven many times that ordinary people like myself have suffered not gained from HPI.

However, what if they go down after you have bought and you end up in Neg Equ? Philosphically, will you still be rooting for lower house prices even if it wipes out your hard earned deposit and prevents you moving on?

My view on it in general is why should the people be bothered if they go up or down. I say that because they usually know what they are getting into when buying, aswell as being prepared to pay the interest rate that they got on their mortgage and hopefully factoring in interst rate rises if they got a good deal/interest rate.

Now if their house drops by £10,000 by next year, why should it matter to them? They had planned from the previous year to spend 'x' amount paying there mortgage, had their house increased or decreased by £10,000 they would still be paying what they had originally planned for and therefore I think it shouldn't make a difference.

The only thing a decrease would affect would be if you wanted to move every 5-10 years or you wanted to play the "housing ladder" game of the past where "that" could be done due to constant HPI.

I personally think that the lower the price of houses, the better for the economy. Then instead of people paying massive amounts to banks for their mortgages, they could be spending their money in the shops etc which would help the economy.

RenovationMan

jay213 wrote: »

My view on it in general is why should the people be bothered if they go up or down. I say that because they usually know what they are getting into when buying, aswell as being prepared to pay the interest rate that they got on their mortgage and hopefully factoring in interst rate rises if they got a good deal/interest rate.

Now if their house drops by £10,000 by next year, why should it matter to them? They had planned from the previous year to spend 'x' amount paying there mortgage, had their house increased or decreased by £10,000 they would still be paying what they had originally planned for and therefore I think it shouldn't make a difference.

The only thing a decrease would affect would be if you wanted to move every 5-10 years or you wanted to play the "housing ladder" game of the past where "that" could be done due to constant HPI.

I personally think that the lower the price of houses, the better for the economy. Then instead of people paying massive amounts to banks for their mortgages, they could be spending their money in the shops etc which would help the economy.

If their house equity drops sufficiently it affects mortgage choices. Someone with 40% equity has a far better range of mortgages to choose from than someone with 20% equity. Someone in negative equity has no choice at all and has to stay with his existing mortgage lender, often at the mercy of their standard variable rate.

This alone can impact someone's finances significantly. It's one of the reasons that I find it difficult to believe that any home owner, unless he already has a lot of equity supplied by past HPI, really wants lower house prices. Graham Devon is different, perhaps because he has a shared ownership home and so any falls in the value of the home allows him to buy out the housing association at a much cheaper price. I have a mate living in London who did this in 2009, and it worked really well for him.

DervProf

When I bought my place, I don't remember being "bearish" or "bullish". I just remember being rather pleased that HPI had not continued from a few years previously, and that I could now afford to buy a place of my own.

Since then, I`ve only wished the same for others. The value of my property is of little significance to me, although it's priceless when it's cold/wet outside.

mcc100

RenovationMan wrote: »

I know we have some home-owning bears on the forum, but these seem almost exclusively to be people who bought before the boom and, like myself, are not worried about a bit of erosion to their unworked for HPI.

At least someone acknowledges that bears can be homeowners ....... I'm a bear because in my opinion I believe that house prices have a long way to fall, not because I want them to ....

DervProf

RenovationMan wrote: »

Once a bear buys he turns into a Bull, either secretly, or like our friend geneer, publically. The allure of HPI is like a drug to some people.

"Some people", that's true.

I was more bearish than bullish before I bought my first place. From that day onwards, I had very, if any interest in the value of my property going up, I was more interested in paying off the mortgage and enjoying a place of my own.

Dan:_4

homelessskilledworker wrote: »

This particular bear will not give a hoot if property prices never go up again once I get another house, and I swear on that.
I would love the idea of every property in the UK being purchased by people just driven by wanting a home. I now it will never happen but I do hope we go more that way.

As soon as you introduce the investment angle into buying property then we are !!!!!!ed, problems arise. The only reason IMO that we are building a bigger national debt by the day is to keep a asset bubble afloat.

I agree with this.

Generali

RenovationMan wrote: »

I've not been on this site as long as some and so I was wondering what happened to property bears on here once they bought?

They stop sh!tting in the woods and use their nice new toilet.

RenovationMan

mcc100 wrote: »

At least someone acknowledges that bears can be homeowners ....... I'm a bear because in my opinion I believe that house prices have a long way to fall, not because I want them to ....

As I said earlier, there are bearish property owners who are happy for house prices to tumble, but these (correct me if I am wrong) seem to be home owners who have bought a long time ago and have had the advantage of HPI. No wonder with all that free money, that they show such largess in their posting?

As I also said, I doubt very much that non-property owning bears will be praying for huge falls in house prices once they buy. Why would they want to see that hard worked for deposit disappear, why would they wish themselves into negative equity?

ILW

This argument that 70% of the population are homeowners seems deeply flawed to me.

I would suggest the number is much less than 50% which could have a bearing on policy from people hoping to get elected.r

I truly believe that cheaper housing whether it be rented or bought could only be a good thing for the vast majority.

Dan:_4

DaisyWheel wrote: »

Hi ILW

What is the evidence for this? I've seen statistics from the EU that Britain's home ownership rates are around 70%, which I think might be a bit high. I would be interested to know where your 50% figure comes from

out of the air most likely