Take cover! The housing market is heading for a bloody and protracted crash!

black_taxi_2

"home ownership" is a myth. If you have an interest-only mortgage - you are renting from your bank."

ukcarper

black_taxi wrote: »

"home ownership" is a myth. If you have an interest-only mortgage - you are renting from your bank."

Yea but other landlords don’t give you a large chunk of the house after 25 years.

Graham_Devon

ukcarper wrote: »

Yea but other landlords don’t give you a large chunk of the house after 25 years.

Neither do the banks.

black_taxi_2

a capital repayment mortgage pays whole amount

interest pays the interest not capital--so 150k mortgage after 25 years still stands at 150k

ukcarper

Graham_Devon wrote: »

Neither do the banks.

If prices only go up 1% a year on average over the 25 years you would get over 20% of the value of the house.

nearlynew

ukcarper wrote: »

If prices only go up 1% a year on average over the 25 years you would get over 20% of the value of the house.

If you can pay back the capital.
Otherwise where would you live?

ukcarper

nearlynew wrote: »

If you can pay back the capital.
Otherwise where would you live?

You would have to go and rent somewhere.

I’m not saying it’s a good idea just that if the only other alternative is renting it’s not so bad and the chances are that the rent will be higher especially as time passes.

black_taxi_2

this brings in---endowment which has a bad record

malkie76

nearlynew wrote: »

If you can pay back the capital.
Otherwise where would you live?

I thought the principle with this technique was to buy somewhere large on interest only - live your life there (have kids etc), then sell at the end of the 25 years and buy somewhere modest outright for retirement (or a small mortgage to cover the difference).

Works if house-prices rise across 25 years, which they historically have (obviously I have no crystal ball for the future).

Average house price in 1987 ~£40k which wouldn't be a frightening amount of capital to repay today.

I certainly wouldn't go for interest only myself, as I'm more of a cautious "bird in the hand" sort of person.

Conrad

shortchanged wrote: »

Maybe because in the real world there are not that many positive things happening with regards to economies at the moment, well in the Western world anyway.

Quite the reverse is true.
We're at long last addressing the rebalancing of the economy.
British business is working smarter than ever to forge links with developing nations such as Brazil.

Personal debt is being paid down.
Many people and companies are cash rich.

This adjustment is not painless, but if you truly have your ears and eyes open with your filters switched to off, you will recognise there is plenty of good schit happening out there.