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

wotsthat

Graham_Devon wrote: »

The reason were not paying it down is simple. Other prices are going up. We know this through the inflation vs wage inflation figures.

So the simple fact is that people are skint? Why would you want interest rates to rise in such an environment?

Don't worry I can see the irony of me arguing the opposite based on people not being skint.

wotsthat

shortchanged wrote: »

:rotfl: And pay with what?? Chocolate coins? Several bags of spuds into the deal?

If someone doesn't have to sell they have the upper hand. Wage inflation & static house prices seems the best hope for would be buyers. Sellers nominally get what they want; buyers get a cheaper house. Everyone's happy?

Graham_Devon

wotsthat wrote: »

So the simple fact is that people are skint? Why would you want interest rates to rise in such an environment?

Don't worry I can see the irony of me arguing the opposite based on people not being skint.

Not skint, no.

The simple fact however is that people are using larger proportions of their incomes to service other essential expendtiture, which will have the knock on effect of making any increases in mortgage payments more difficult to manage for many who managed previously.

Add in those "mortgage prisoners" and the outcome could arguably be worse.

All I'm saying is, we can look at minute details all we like. But the overwhelming drag on the housing market is the (nigh on inevitable) increase in mortgage rates. The only thing at the moment is we don't know when this will happen en masse, and we don't know the impact (severity of the increases).

What we do know, is mortgage providers are now moving away from the BOE rates. This was something I remember commentators warning on in 2010, when they suggested interest rates so low for so long is playing with fire. Could prove a double whammy with mortgage lenders increasing interest rates internally and then increasing them again with BOE rates move.

If you have an argument that suggests the housing market can survive an uplift of say 3-5% in mortgage rates, without damage to values, then I'd be all ears.

My personal feeling is that far from sorting out the initial issues from the credit crunch, we will hit round 2 of the credit crunch....of which all this kicking into the long grass will have made things ultimately worse. All I have trouble with, is giving you the timescale.

shortchanged_2

wotsthat wrote: »

If someone doesn't have to sell they have the upper hand. Wage inflation & static house prices seems the best hope for would be buyers. Sellers nominally get what they want; buyers get a cheaper house. Everyone's happy?

Well with all the props in place at the moment that is why sellers currently have the upper hand as such i.e there are very few distressed sellers, mainly thanks to low interest rates.

Obviously you think high house prices are a good thing wotsthat, but it's the poor FTB's who are supposed to continue to fuel this overpriced pyramid scheme. So in your eyes FTB's should take out massive loans from the start to bail out/hand loads of free cash [delete as appropriate] to those further up the ladder, is that right?

wotsthat

Graham_Devon wrote: »

You could do this with any news outlet, as they report news.

Be that the guardian, telegraph, FT, Mail, Sun, Mirror.

Probably the only one you couldn't suggest reported one thing and then the opposite view is the Express.

They are delivering a product to customers and are trying to appeal to their readership. If Moneyweek started delivering bullish stories their readership would disappear in search of a publication delivering bearish news.

Having a vested interest is seen as the ultimate put down on here. Newspapers have the biggest VI going and their views have to be taken with a pinch of salt.

The sad thing is you can't just choose not to buy them as their views are touted on TV & radio headline 'reviews' - usually with a guest newspaper editor or the expert comment of a celebrity.

wotsthat

shortchanged wrote: »

Well with all the props in place at the moment that is why sellers currently have the upper hand as such i.e there are very few distressed sellers, mainly thanks to low interest rates.

Obviously you think high house prices are a good thing wotsthat, but it's the poor FTB's who are supposed to continue to fuel this overpriced pyramid scheme. So in your eyes FTB's should take out massive loans from the start to bail out/hand loads of free cash [delete as appropriate] to those further up the ladder, is that right?

I don't think high house prices are a good thing but do think that falling prices won't deliver the utopia that the bears are hoping for.

I think the props are overplayed and I don't think there's a pyramid scheme.

I'd like an increase in building, an increase in lending, stable prices with real declines for a while, and a decrease in BTL.

Oh and world peace.

shortchanged_2

wotsthat wrote: »

I don't think high house prices are a good thing but do think that falling prices won't deliver the utopia that the bears are hoping for.

I think the props are overplayed and I don't think there's a pyramid scheme.

I'd like an increase in building, an increase in lending, stable prices with real declines for a while, and a decrease in BTL.

Oh and world peace.

So I'll ask you then wotsthat. How do you explain the very low level of housing transactions over the past couple of years?

moneyinmypocket

Here we go again..

wotsthat

shortchanged wrote: »

So I'll ask you then wotsthat. How do you explain the very low level of housing transactions over the past couple of years?

p**s poor economy, lack of confidence, sudden introduction of stringent/ sensible deposit requirements, limited funds for mortgage lending etc. etc.

Would prices 13% lower than now be a cure all? Er no.

shortchanged_2

wotsthat wrote: »

Would prices 13% lower than now be a cure all? Er no.

It certainly would help but it wouldn't go far enough.