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Debate House Prices
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Home Equity increases by 2.7% in 2011
Comments
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Well lets put it this way, if I didn't own a house I would spend a long time worrying about whether I had put away enough to keep paying rent during my dotage. For someone who had lived in a cheap property for the majority of the time they had owned it not to consider how they were going to pay off the relatively small amount they would owe would be stupid
Another large assumption.
What on earth makes you simply assume that people with IO mortgages are living in "cheap property".
What's cheap? Where was all this "cheap property" that IO mortgage holders miraculously found themselves stumbling over in the last few years?
Errr, they don't need to find £125 per month. They have to find 30k. There and then. The equivalent monthly payments over 20 years has got absolutely nothing at all to do with it. You may aswell have said "well it's only £12.50 a month if you spread it over 200 years...I don't see an issue".Say the average mortgage ended at age 55 then I would expect them to live at lease another 20 years - if they had to find £30k in order to remain living rent free that would be the equivalent of £125 per month compared to the average rent of £650 (or so) and increasing with inflation.
Some very nice, very large assumptions (ages, house prices, time of buying), but again, it's ALL hindsight, all made up assumptions. Sure, it will relate to someone somewhere, I'll give you that.0 -
Graham_Devon wrote: »Another large assumption.
What on earth makes you simply assume that people with IO mortgages are living in "cheap property".
What's cheap? Where was all this "cheap property" that IO mortgage holders miraculously found themselves stumbling over in the last few years?
Errr, they don't need to find £125 per month. They have to find 30k. There and then. The equivalent monthly payments over 20 years has got absolutely nothing at all to do with it. You may aswell have said "well it's only £12.50 a month if you spread it over 200 years...I don't see an issue".
Some very nice, very large assumptions (ages, house prices, time of buying), but again, it's ALL hindsight, all made up assumptions. Sure, it will relate to someone somewhere, I'll give you that.
Its a cheap property because when they bought it their mortgage would probably be around or a bit more than they would pay rent, from then on in it would become cheaper than a similar rental property. In that respect it would be a cheaper to live there for many years by paying the mortgage than say a tenant in a similar property would pay.
I said the equivalent of £125 a month so maybe they should have been finding it for the years preceding the end of the mortgage.
As for the "its all an assumption" only a fool would predict that house prices will not be massively higher in 25 years than they are today (someone mention Japan please).0 -
Its a cheap property because when they bought it their mortgage would probably be around or a bit more than they would pay rent, from then on in it would become cheaper than a similar rental property. In that respect it would be a cheaper to live there for many years by paying the mortgage than say a tenant in a similar property would pay.
OK, so you are basing your "cheap" property on a price paid around 20 years ago, to the price paid today for rental? I assume we are to ignore all those IO mortgages taken after 2000 and only look at those who took one in 1994? (better for the HPI argument, see).
You are then comparing this to tenants? This thread has nothing to do with tenants. It's about repayment vs interest only mortgages.
Right. But if they haven't? Which is the whole point being discussed....which evidence says they havent!!!! Dearie me. Yes, we agree, maybe they should have done. But then they probably didn't because they coudn't afford that £125 a month, hence IO!!! Hardly puts to bed the argument that interest only mortgages are problematic.I said the equivalent of £125 a month so maybe they should have been finding it for the years preceding the end of the mortgage.
Having massively higher house prices does NOT pay off your interest only mortgage!!!! (and allow you to stay living in the house, for the pedants among us).As for the "its all an assumption" only a fool would predict that house prices will not be massively higher in 25 years than they are today (someone mention Japan please).
If you have a 60k debt to pay off, even HPI at 1000% a year for the entire mortgage term aint gonna put 60k in your pocket to pay the mortgage off (again, and stay in the house).
God it's like pulling teeth. Just go round and round with the same lines, regardless of what people have said in response. The response to the arguments put forward is simply to say exactly the same thing.0 -
Graham_Devon wrote: »What on earth makes you simply assume that people with IO mortgages are living in "cheap property".
What's cheap? Where was all this "cheap property" that IO mortgage holders miraculously found themselves stumbling over in the last few years?
Good point.
A smaller assumption is that those on IO mortgages (excluding BTL landlords) are likely to have bought or remortgaged in the past 5-10 years. I suspect that the availability of IO mortgages was much wider during that period, and rapid HPI encouraged more people to take the IO option.
Yes, it's an assumption, but I don't think it's an unreasonable one. How many people who have recently taken IO mortgages that are in trouble, or will get into trouble is impossible to say. What is a little bit easier to predict is that the likelyhood of HPI being as high in the next 10-20 years as it has been over the past couple of decades is small. Yes, we have a limited supply of property, but it seems that our economy is going to be under quite a lot of pressure from the rest of the world. We'll get HPI, I'm pretty sure of that, but will it be enough to make the remaining amount owed at the end of a current IO mortgage seem insignificant ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
Graham_Devon wrote: »OK, so you are basing your "cheap" property on a price paid around 20 years ago, to the price paid today for rental? I assume we are to ignore all those IO mortgages taken after 2000 and only look at those who took one in 1994?
You are then comparing this to tenants? This thread has nothing to do with tenants. It's about repayment vs interest only mortgages.
Right. But if they haven't? Which is the whole point being discussed....which evidence says they havent!!!! Dearie me.
Having massively higher house prices does NOT pay off your interest only mortgage!!!! (and allow you to stay living in the house, for the pedants among us).
God it's like pulling teeth. Just go round and round with the same lines, regardless of what people have said in response. The response to the arguments put forward is simply to say exactly the same thing.
!!!!!!. When I said living in a relatively cheap property I meant it was cheap to live in (that's where the comparison to tenants come in). I suspect you are pretending to be dense on purpose.
Who says they haven't - has someone posted the figures for number of people who find themselves unable to sell their property and find another with the equity released?0 -
Kennyboy66 wrote: »It not a debate though is it ?
You have a closed mind and no matter what evidence people put forward, it will be out of date/too small a sample/not reflecting current events.
It is monumental bores like yourself that has resulted in the more interesting and informative posters giving up.
LOL, and you have an open mind, posting this sort of stuff?
I've never yet seen you even enter a debate with anyone, closed or open minded. You just pop up very occasionally and throw abuse about. I think someone said you're a sockie. I dunno about that but one does wonder when all you post is this crap.
Anyway, time to give up the ghost when the sockies start appearing. As I said, it was an interesting discussion while it lasted. Shame about the sockies and West Side Story bear/bull rubbish.
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Who says they haven't - has someone posted the figures for number of people who find themselves unable to sell their property and find another with the equity released?
No, but can you give me the evidence going forward please?
This is just hindsight....again!
In actual fact...sorry, but i give up.0 -
RenovationMan wrote: »LOL, and you have an open mind, posting this sort of stuff?
I've never yet seen you even enter a debate with anyone, closed or open minded. You just pop up very occasionally and throw abuse about. I think someone said you're a sockie. I dunno about that but one does wonder when all you post is this crap.
Anyway, time to give up the ghost when the sockies start appearing. As I said, it was an interesting discussion while it lasted. Shame about the sockies and West Side Story bear/bull rubbish.
Well, glad to see it was everyone elses fault.0 -
Graham_Devon wrote: »No, but can you give me the evidence going forward please?
This is just hindsight....again!
In actual fact...sorry, but i give up.
Good. I am certainly thankful.0 -
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