MSE News: Interest-only mortgages could be 'thing of the past'

gingeralan

Further to this Manchester was one of the major drivers in the house price boom. I remember going to visit my gran when I was younger and regiment being shocked at the prices of property over there. You are well aware that the individual stats for Manchester alone are not available from that time.

RenovationMan

gingeralan wrote: »

You have just priced my point, you borrowed 5x your income, and need Isaac lending and low interest rates to keep you in your precarious situation. What if your other half stopped working and interest rates went back to their historic norms of around 4%.

Btw a link to your chart http://www.moneyweek.com/investments/property/uk-house-prices-will-plummet-look-at-this-scary-chart-14664

I don't know how I have 'priced' your point. You told me that I hadn't borrowed 5 x my income and when I say that I agree with you and point out it was shortchanged who said I had borrowed 5x my income, you are now changing your tune and saying that I have borrowed 5 x my income. Make your mind up.

I have no idea what isaac lending is.

I always view historic norms as 6% myself and have calculated that we won't have any problems if rates go upto 10%. I have never seen rates as high as that since I got my first mortgage in 1995, but it'sbest to err on the side of caution.

These projections are based on my income and if jobs were lost then our emergency savings coupled with income protection insurance and any redundancy money would keep us going until new jobs were found. Just like pretty much everyone else in the country who has a mortgage (IO or repayment).

RenovationMan

gingeralan wrote: »

Further to this Manchester was one of the major drivers in the house price boom. I remember going to visit my gran when I was younger and regiment being shocked at the prices of property over there. You are well aware that the individual stats for Manchester alone are not available from that time.

Hold on, you're saying that you visited your granny in 1998 and remarked the difference in house prices between then and 1995?

Really?

gingeralan

RenovationMan wrote: »

Hold on, you're saying that you visited your granny in 1998 and remarked the difference in house prices between then and 1995?

Really?

You prove to me that there was no house price inflation in Manchester.

Apologies for typos it's the text input on my phone it seems to change random words, priced is proved, Isaac is lax.

RenovationMan

gingeralan wrote: »

You prove to me that there was no house price inflation in Manchester.

Apologies for typos it's the text input on my phone it seems to change random words, priced is proved, Isaac is lax.

You're the one who says there was, it's for you to prove that you're correct. That's how it works in debates.

NP with the typos, I make enough of them myself.

gingeralan

RenovationMan wrote: »

You're the one who says there was, it's for you to prove that you're correct. That's how it works in debates.

NP with the typos, I make enough of them myself.

I have shown you a chart from a reputable publication which suggests there was Hpi from 91 or 92 to 2002, so you must now show me something which disputes the information displayed.

RenovationMan

That chart was for England as a whole. Are all regions in the UK falling at the same rate at the moment? I'm sure I saw somewhere that the NE was falling at a much higher rate than the SE.

I don't need to prove anything, I lived in Greater Manchester in 1995 to 1997 and I know that house prices were not booming, they were bumping along after a HPC.

Getting back to the wider picture, can you explain why I personally need house prices to rise and for 'issac' lending to be in place? Here are the facts for you to base your judgement on:

1. This is our 'forever' house. We will be here for at least 23 years. After which we might down size or alternatively we might rent out the large house and live in the 'granny annexe'.

2. We are renovating the house with the aim of reducing its carbon footprint and to make it as cheap to run as an average 3 bed semi.

3. We have overpaid our mortgage to the tune of £50k over 2 years and we are continuing this overpayment until our mortgage is down to what you'd pay for an average 3 bed semi. We are on track to reduce our mortgage down to an LTV of 50% by the time we complete our current deal.

Now, you stated that we were 'worried' and needed to maintain the status quo, finance wise. So why is that?

gingeralan

RenovationMan wrote: »

That chart was for England as a whole. Are all regions in the UK falling at the same rate at the moment? I'm sure I saw somewhere that the NE was falling at a much higher rate than the SE.

I don't need to prove anything, I lived in Greater Manchester in 1995 to 1997 and I know that house prices were not booming, they were bumping along after a HPC.

Getting back to the wider picture, can you explain why I personally need house prices to rise and for 'issac' lending to be in place? Here are the facts for you to base your judgement on:

1. This is our 'forever' house. We will be here for at least 23 years. After which we might down size or alternatively we might rent out the large house and live in the 'granny annexe'.

2. We are renovating the house with the aim of reducing its carbon footprint and to make it as cheap to run as an average 3 bed semi.

3. We have overpaid our mortgage to the tune of £50k over 2 years and we are continuing this overpayment until our mortgage is down to what you'd pay for an average 3 bed semi. We are on track to reduce our mortgage down to an LTV of 50% by the time we complete our current deal.

Now, you stated that we were 'worried' and needed to maintain the status quo, finance wise. So why is that?

You are now not listening to rational arguments. I have shown you a chart which while it does cover the whole of the country, it is the only source of evidence we can produce, so your just restating that in your opinion there was no Hpi in your area does not really hold water.

With regards to point 2 good luck with that, I understand from my admitted basic knowledge of older buildings, if you try and insulate like a modern house you end up with damp problems, they were built so that the drafts kept the house dry. To affect this flow of air could cause damage elsewhere.

I hadn't really noticed the interest rate gamble thread till it was mentioned here, haven't read it, but the sheer fact you decided to call it that indicates that you are aware of the risk involved, yet here you seem to dispute that, the financial status quo relates to everything, interest rates, qe, your job (s) remaining in the current state they are.

I say again, I would like to see proof of your opinion that there was no Hpi in Manchester, even if (though I doubt it) there was none between 95 and 98 what about between98 and now? If you deny that then I call you troll and claim my 5 pounds.

RenovationMan

gingeralan wrote: »

You are now not listening to rational arguments. I have shown you a chart which while it does cover the whole of the country, it is the only source of evidence we can produce, so your just restating that in your opinion there was no Hpi in your area does not really hold water.

Do you think it's rational to assume that every region of the UK rises and falls at the same time and same rate? If so, then I suggest you look at graphs showing regional variances in the HPC falls over the last 3 years to see how wildly they can vary. You will also see, amazingly, that some areas actually increase while others decline.

gingeralan wrote: »

With regards to point 2 good luck with that, I understand from my admitted basic knowledge of older buildings, if you try and insulate like a modern house you end up with damp problems, they were built so that the drafts kept the house dry. To affect this flow of air could cause damage elsewhere.

Your lack of knowledge doesn't seem to stop you expressing yourself.

Rest assured that I have put as much research into the renovations as I did with my finances before I bought the house. I am using traditional lime based products that allow the walls to breathe.

gingeralan wrote: »

I hadn't really noticed the interest rate gamble thread till it was mentioned here, haven't read it, but the sheer fact you decided to call it that indicates that you are aware of the risk involved, yet here you seem to dispute that, the financial status quo relates to everything, interest rates, qe, your job (s) remaining in the current state they are.

I say again, I would like to see proof of your opinion that there was no Hpi in Manchester, even if (though I doubt it) there was none between 95 and 98 what about between98 and now? If you deny that then I call you troll and claim my 5 pounds.

You seem to know a lot about my 'gamble' for someone who hasn't been a forum member for long and who does not frequent the same boards as me. However, you made statements that indicated you thought I was in a precarious position financially. I was merely interested in how you came by that decision based on so little information. Never mind, if it's like any of your other posts, I won't get that info because you didn't base your statement on anything - much like your other statements in this thread.

How can I be the troll, you're the one who personalised all this by making claims that I was in a precarious financial position, etc. I'm merely defending myself. I haven't said anything about your own finances, have I?

I also havn't claimed that there was no HPI between 98 and now. Another strawman argument you seem to be building.

Thrugelmir

gingeralan wrote: »

3) many people feel they played the market well yet simple analysis shows that the houses around increased in value anyway and if you just looked at the % increase in price paid it would have been more than the "profit" they made.

That's a factor most amateur developers overlook when they remiss about the boom days. Easily available credit was funding the market. Not capital investment.