BTL Boom continues

Percy1983

chucky wrote: »

So you're thinking for yourself instead of the human race. Ok then.

It is clear that wanting lower house prices by posting about it on an Internet forum and actually wanting lower house prices are two completely different things.

wotsthat wrote: »

Everyone's a lone seller aren't they? Why do you need the comfort of other people bringing their price down before you're willing to do the same with yours?

You could sell it to your brother for 3 x his salary if that's what you think the correct market price should be.

Ok so I should buy a house for £100k then sell it for £70k then buy another for £100k and sell for £70k, as nice as it would be to be able to correct the market by myself I see a problem in that plan.

RenovationMan wrote: »

Didn't you buy a house recently? If you did, then you're saying that you hope you go into negative equity so that other people get a house cheaper than you bought it for, even though it puts you and your wife and kids into financial danger.

Course you do. :rotfl:

What is the financial danger? I will just have to... live in it and keep paying the mortgage.

Feel free to store this as a quote, I will be quite happy in negative equity for the greater good.

Maybe just maybe I can see the bigger problem, just because I have jumped on doesn't mean I want to pull the ladder up.

the_flying_pig

RenovationMan wrote: »

Didn't you buy a house recently? If you did, then you're saying that you hope you go into negative equity so that other people get a house cheaper than you bought it for, even though it puts you and your wife and kids into financial danger.

Course you do. :rotfl:

i find it, well, depressingly witless really, that you struggle to believe that.

according to his sig percy's in his late 20s. I assume therefore that he's a FTB. I also assume that he'd like to trade up to a bigger place in the future. HPI from this point would hurt his ambitions to trade up.

what about house price falls? well, unless they wiped him out, made it impossible for him to borrow to trade up by reducing his equity to a tiny or negative amount, they help him.

if percy's on a repayment mortgage, say, 20/25 yrs, then he'll have paid off something like 15/20% of his balance in 5 years' time.

so adding up his deposit [you typically need something like 10-15% to buy these days] & these repayments it's pretty obvious that percy won't be in NE 5 years hence unless prices are 30% down from where they are now. now, with the best will in the world this is unlikely to happen - the printing presses will roll back into life long before things get to that stage.

RenovationMan

Percy1983 wrote: »

What is the financial danger? I will just have to... live in it and keep paying the mortgage.

Until you.... lose your job and need to sell the house. Naturally this doesn't happen. Oh, hold on let's check out the DFW pages.

Until you... split up from your partner and neither of you can afford the mortgage on your own. Naturally this doesn't happen. Oh, hold on let's check out the DFW pages.

Until you... have a great job offer and need to relocate but can't sell your house in order to do so.

Etc, Etc.

http://tutor2u.net/blog/index.php/economics/comments/negative-equity-why-is-it-a-problem/

Sorry, I refuse to believe that people save up for deposits over several years and then are happy for that deposit and more besides to be lost just so that other people don't have to work so hard to get their own house.

Sorry, you're talking bollox. You know it and I know and all the other 12 people who frequent this board, know it. :cool:

RenovationMan

the_flying_pig wrote: »

what about house price falls? well, unless they wiped him out, made it impossible for him to borrow to trade up by reducing his equity to a tiny or negative amount.

Ah, you're getting it now. Try and keep up, it's not rocket science. :rotfl:

wotsthat

Percy1983 wrote: »

Ok so I should buy a house for £100k then sell it for £70k then buy another for £100k and sell for £70k, as nice as it would be to be able to correct the market by myself I see a problem in that plan.

Your brother gets a house for what you think should be the correct market value and you'll only take 4 months to get a deposit together. What is the problem you see exactly?

You might set a trend and everyone else that pretends that they don't mind losing housing equity can join in.

I think up your way it's called being all talk and no trousers.

The_J

I can't believe that you are even having to have this argument RM.

The post above you is stunning. It is suggesting that he should be happy to see his initial deposit wiped out by a house price fall....because he will build up another deposit in the next 5 years. Why not just....not buy if that's that case?

I am literally lost for words that someone so stupid can operate a computer. It is a miracle.

the_flying_pig

RenovationMan wrote: »

Ah, you're getting it now. Try and keep up, it's not rocket science. :rotfl:

read my post properly.

huge falls could hurt him, absolutely.

but stagnation or small to medium sized falls would help.

the_flying_pig

The_J wrote: »

I can't believe that you are even having to have this argument RM.

The post above you is stunning. It is suggesting that he should be happy to see his initial deposit wiped out by a house price fall....because he will build up another deposit in the next 5 years. Why not just....not buy if that's that case?

I am literally lost for words that someone so stupid can operate a computer. It is a miracle.

assume percy buys a £100k house with a £20k deposit. he's got his eye on a £200k house 5 years down the line.

in scenario 1 house prices stay exactly the same for 5 years. so in 2017 his total equity is about £35k - his initial £20k plus his repayment mortgage has paid off about another £15k. he needs to borrow another £165k to buy that £200k house.

in scenario 2 house prices fall by 20%. his deposit is wiped out. but he's still paid off £15k of his mortgage, so he's not in NE. the more expensive house will now only cost him £160k. so he needs to borrow £145k to buy it.

so percy is quite possibly better off under scenario 2.

he's definitely better off if he's made some meatry overpayments, or racked up some meaty savings, in that time. he's only worse off in scenario 2 if his total savings and equity is pushed so low as to mean that he can't afford to trade up or remortgage. and if he's on a repayment mortgage & starts with a decent deposit this is very unlikely to happen.

the maths are different, of course, if he's a much older person with an eye on trading down, selling up, or whatever. but percy was born in 1983. he's got no interest in high house prices.

Graham_Devon

RenovationMan wrote: »

Now if those 'homeowning bear' would stop their claptrap of wanting houseprice falls for the good of the Human Race, and admit they do it because they aren't personally impacted financially by falling house prices and they simply want to mock/have a rumble on an internet forum with those that are impacted financially by falling house prices.

I am impacted by falling prices, in many ways.

One, the house value. Two, harder to get a mortgage.

I truly truly believe AFTER the house prices falls have settled, we ALL would be in a much much better position. Not only would new entrants to the housing market have a little more cash to spend in other business areas, such as leisure, but more cash to back themselves up for any event.

The more money put into mortgage debt repayment, the less money for the rest of the economy....also the more people using benefits for living costs.

Call me stupid if you like.....but I can't see the genius in wanting the next house to cost you MORE. I want to move to a bigger / nicer home. By wanting HPI, I'd only being making that move financially harder.

Graham_Devon

wotsthat wrote: »

You could sell it to your brother for 3 x his salary if that's what you think the correct market price should be.

Actually, you couldn't, not without proper legal proceedings.

But this ever tiresome fallback position to "sell your house lower than anyone elses" is pointless. As has been said in response many many times (which is ignored every time), no one in their right mind is going to sell their house much lower than a fair value.

Reason being, they have to buy the next house.

Sellign your house at fair market value (after falls) and selling your house far below market value are two different things. You know that, I know that, we both know this is simply an internet argument of who can gain the moral highground.