BOE's David Miles: House Prices will "Rise for Years"

DervProf

suburbanwifey wrote: »

If it fell in value, then I would feel cheated on what I paid, as in effect I would have paid more than it was now worth.

That's pretty narrow minded thinking in my opinion.

The house is yours to live in for as long as you please. You are not paying rent, and you have only made money on paper. If the value of you house falls you have only lost money on paper.

I am in a similar situation to you, and the only "warm fuzzy feeling" I get from owning my own home is that I am not paying a mortgage (well I am, but it's miniscule) and that I don't have to buy at today's prices. This is tempered somewhat by feeling a little sorry that my friends and families kids will probably not have such an easy time as I did in buying a place of their own. I also don't really like the fact that the banks are making so much money out of buyers of property.

The value of my home could fall to zero, and I would hardly flintch, I reckon I`ve already had my money's worth out of it. Admittedly, it would be be bad news for many people who are currently paying mortgages.

suburbanwifey

DervProf wrote: »

That's pretty narrow minded thinking in my opinion.

The house is yours to live in for as long as you please. You are not paying rent, and you have only made money on paper. If the value of you house falls you have only lost money on paper.

I am in a similar situation to you, and the only "warm fuzzy feeling" I get from owning my own home is that I am not paying a mortgage (well I am, but it's miniscule) and that I don't have to buy at today's prices. This is tempered somewhat by feeling a little sorry that my friends and families kids will probably not have such an easy time as I did in buying a place of their own. I also don't really like the fact that the banks are making so much money out of buyers of property.

The value of my home could fall to zero, and I would hardly flintch, I reckon I`ve already had my money's worth out of it. Admittedly, it would be be bad news for many people who are currently paying mortgages.

Yes, on reflection it is a bit narrow minded. If I had children, I would feel very sad and worried for them, I do not think home ownership will be easy at all for coming generations. Yes, that warm feeling for having no mortgage and losing that chain from around one's neck is the main reason for that warm, fuzzy feeling. I agree with all you have said. I don't like how much money the banks make out of people either and feel sad for kids out there who dream of owning their own home and have to save up 30K deposits? its ludicrous.

suburbanwifey

ILW wrote: »

I am in a similar position to you, mortage paid off 5 years ago, no desire to move etc. But I do have a son who now has a mortgage and I would have been happier if he had bought at half the price he had to pay. The fact that my place is worth 3 times what I paid is of no benefit to anyone really.

No, you are right, what our properties are worth is unimportant in the great scheme of things. I was saying to hubby a few days ago what our house is now worth and how much we have *made* and he said 'Who cares, we aren't ever selling it and we will die there, so what does it matter? I don't care if they rise or fall' I shut up then He had a good point.

CRASH_BANG_WALLOP

so another dudess with no children that cheers prices rises and 100% mortgages. if you had them you would no doubt think differently. not a dig at you by the way just seems a common factor of the hpi dudes
sibley/mr ree will now distance himself from you as you got your house from someone elses misfortune

suburbanwifey

CRASH_BANG_WALLOP wrote: »

so another dudess with no children that cheers prices rises and 100% mortgages. if you had them you would no doubt think differently. not a dig at you by the way just seems a common factor of the hpi dudes
sibley/mr ree will now distance himself from you as you got your house from someone elses misfortune

AT LAST you have accepted I am a Dudess :j you've made my day in fact, I am now so happy I'm off to eat my breakfast, my work here is done Aw ... I quite like Sibley, shame he'll ostracize me now *sulk*

Emy1501

Article fails to the address the affordability problem and just seems to trying to find away to keep HPI going.

Reality is 100% mortgages disappeared nearly 4 years ago now and if deposits were really the problem we should be seeing the market naturally pick up in due course as people should have started saving for a deposit once 100% mortgages disappeared. 90% mortgages are readily available now and even 95% are available to 1st time buyers.

The problem also is no bank o saver is going to intersted in investing in the housing market at the moment and also the suggestion simply makes the second jump up the ladder even less affordable than it is now.

Affordability is as much of a problem as deposit and with he new way of working out affordability by lenders it going to hard to see where real term growth can come from outside of the hotspot areas like central london.

Sibley

AT LAST you have accepted I am a Dudess :j you've made my day in fact, I am now so happy I'm off to eat my breakfast, my work here is done Aw ... I quite like Sibley, shame he'll ostracize me now *sulk*

No way. You are my hero :beer:

I knew as soon as I read your views the renters would accuse you of being me.
I told you there would be some twisted up people having a pop at you.

I don't mind anyone normal making a killing. I just don't want the crashers getting a bargain off our backs.

CRASH_BANG_WALLOP

Sibley wrote: »

No way. You are my hero :beer:

I knew as soon as I read your views the renters would accuse you of being me.
.

im mortgage free :cool: you FAIL again

IveSeenTheLight

Emy1501 wrote: »

Article fails to the address the affordability problem and just seems to trying to find away to keep HPI going.

You have to wonder if affordability and HPI are inherantly linked.

with demand increases as population increases, it drives up prices such that fewer, wealthier people have the opportunity to buy.

Until the supply meets and indeed esceeds the demand will you see properties being increasingly affordable to more.

Emy1501 wrote: »

Reality is 100% mortgages disappeared nearly 4 years ago now and if deposits were really the problem we should be seeing the market naturally pick up in due course as people should have started saving for a deposit once 100% mortgages disappeared. 90% mortgages are readily available now and even 95% are available to 1st time buyers.

This is true to an extent, people have had the opportunity to save during those 4 years, however we also see that in that time, inflation has increased the costs of other things, meaning the saving potential has been eroded.

Most people want to secure a property at the earliest opportunity and if lower deposit credit was available, more would utilise to use their savings elsewhere. Maybe not the best moneysaving but true nonetheless

Emy1501 wrote: »

The problem also is no bank o saver is going to intersted in investing in the housing market at the moment and also the suggestion simply makes the second jump up the ladder even less affordable than it is now.

Banks are lending mortgage products, people are buying albeit at lower transaction levels than before, so quite simply there is interest in lending / buying in the housing market.

People should consider if the market norms have changed to reflect the current economy.

Emy1501 wrote: »

Affordability is as much of a problem as deposit and with he new way of working out affordability by lenders it going to hard to see where real term growth can come from outside of the hotspot areas like central london.

Affordability is at the lowest rate for years, largely as a result of the current mortgage rates........

http://www.lloydsbankinggroup.com/media/excel/2012/AffordabiltyQ42011.xls

Mortgage Repayments as a percentage of income is currently 26.6% on average as opposed to the 28 year average of 36.5%

IveSeenTheLight

CRASH_BANG_WALLOP wrote: »

so another dudess with no children that cheers prices rises and 100% mortgages. if you had them you would no doubt think differently.

As a father, homeowner and landlord, I benefit from HPI.
So do my children, indeed they were part of the reason we invested in property.

Should property rise in the next 20 years as most would expect, I've protected my childrens future affordability against the historical price that was paid for them.

I bought my leased properties in 2004, 2007 and 2011.
If in 20 years my kids can't afford property because the affordability criteria restricts them, they'll have the opportunity to buy at 20 year old pricing.

Hands up who would like to buy a property today at 1991 prices?

Ok, in 20 years time there might not be the same level of HPI that there was in the last 20 years, but it still safeguards their future buying ability.

The above all may be selfish, but that is natural life.
One protects their own