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Debate House Prices
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Mortgage rates going up
Comments
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shortchanged wrote: »level playing field
That's what we need, and not on top of a 2000m mountain with steep sides all around.
We don't need hocus-pocus lending products and constant rule changes. We need a clear and equal for all system that allows people to buy property if they can afford it, and doesn't expose either individuals or banks to too much risk. I think there is enough recent evidence to show what happens when banking gets "all creative".30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
I think there is enough recent evidence to show what happens when banking gets "all creative".
Yes there is.
A "bad bank" comprising the "worst" of those creative products made over three quarters of a BILLION pounds in profit last year.
Northern Rock Asset Management (NRAM) saw underlying profit before tax rise from £191m in 2010 to £790m in 2011“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Yes there is.
A "bad bank" comprising the "worst" of those creative products made over three quarters of a BILLION pounds in profit last year.
It is open to debate whether it helped the wider economy as a whole.
When it gets to a point where a large percentage of the economy is drawn away from production, profitable services, etc and just begins to rely on the trading of assets, things can get pretty sticky, pretty fast. As has been shown.0 -
shortchanged wrote: »The only problem with your system RenoMan is that it will result in an ever widening gap in the price of houses at the lower end to those in the upper end, so potentially the opportunity to climb the ladder will become more and more difficult. Sort of what's happening now in a way.
Would it though?
If the difference between a 3 and 4 bed is £100,000.
Then people would buy a suitable 3 bed and extend it.
Property has a relative relationship too, in terms of being a ladder.0 -
HAMISH_MCTAVISH wrote: »Yes there is.
A "bad bank" comprising the "worst" of those creative products made over three quarters of a BILLION pounds in profit last year.
Fine.
However, I seem to remember a lot of problems around the time that this "creative" bank hit the buffers. Did the taxpayer not have to come to the rescue ? Would it not have been better to not allow this bank to be so creative with their lending, which would almost certainly have resulted in it not requiring drastic intervention from the government ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
Thrugelmir wrote: »Would it though?
If the difference between a 3 and 4 bed is £100,000.
Then people would buy a suitable 3 bed and extend it.
Property has a relative relationship too, in terms of being a ladder.
I'm sure the cost of adding that extra bedroom might be increased, when the builder knows what value it will put on the property.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
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I'm not saying the future is going to be the same as the past but history suggests that 8% mortgage rates are rare. When do you think we'll see typical mortgage rates of 8%? Let's say that it'll be in 5 years time - long enough for someone to buy themselves a nice house, get some debt paid down and try and improve their income at the same time?
...
The irony is that if I'd been a 'debt junkie' I would more financially secure and sat in a bigger house and easily affording the repayments even at 8%. I don't know how old you are but I'd bet you would have been better off by being a 'debt junkie' too.
You are obviously too young to remember mortgage rates being around 12-15% in the early 80s and 90s then...
...a lot of "debt junkies" got repo'ed then...0 -
I'm sure the cost of adding that extra bedroom might be increased, when the builder knows what value it will put on the property.
While the extension adds some money on to the value of the property with the houses it doesn't put on the full £100K of an original 4 bedroom house. That's because the houses with 4 bedrooms still have space to be extended.I'm not cynical I'm realistic
(If a link I give opens pop ups I won't know I don't use windows)0 -
Thrugelmir wrote: »In my experience there's plenty of good tradespeople who are content to earn a living not rip customers off.
And I share that experience too, along with knowing that there are bad tradespeople who are happy to make a living by charging rip off prices.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
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