House prices suffer biggest drop since 2009 - Nationwide -2.6%

Dan:_4

This is good news.

And its still summer. Imagine the falls we will experience, when the olympics is a distant memory during thos elong cold winter months.

I can't wait.

N1AK

2.6% falls year on year sounds ok to me. Small enough not to completely stuff anyone who bought near peak and big enough (added to inflation) that houses are becoming considerably more affordable.

4 years ago at peak the average house price was about £210,000 adjusted for inflation. We're currently at ~£165,000 that's a large re-adjustment though sadly it doesn't seemed to have broken the mentality a lot of people have that housing is a great investment; this could mean a swift increase if the economy strengthens.

Graham_Devon

RenovationMan wrote: »

Good news for those wanting lower house prices, but I'm still not convinced that it's worth holding on with annual drops of only 2.6 percent. Especially given that someone who had bought a year ago on a repayment mortgage would have reduced their mortgage by 4% by now

1.8% approx.

That's with an interest rate at 6%

homelessskilledworker

RenovationMan wrote: »

I know that the interest is loaded up front on a repayment mortgage and that the majority of the capital repayment is on the back end. However, averaged out over the lifetime of a 25 year mortgage, the repayment portion is 1/25th or 4%.

Everyone who buys a house with a mortgage will be subject to this front loading, so the point is that someone who bought 12 months ago will obviously be 1 year further down the road. As many people on ere have been waiting 5 or more eyars to buy, then they are even furtherbehind the curve - which is fine if there are significant drops that justify the wait.

The point of my post is that I personally don't feel that the drops over the last few years were worth the wait for many people.

And what about those on interest only mortgages, and those put on interest only just recently because they cannot afford the repayment mortgage and in many cases are in arrears.

Todays sellers are sitting tight waiting for the old days to come back, and todays buyers have no choice either way as the lenders are not lending. I have no idea how this is going to pan out, I just know something will give at some point.

RenovationMan

Graham_Devon wrote: »

1.8% approx.

That's with an interest rate at 6%

2.061% on a £100K mortgage at 5%.

This is my point, because of the random nature of people's interest rates over the lifetime of a mortgage, there is no way of calculating the actual repayment percentage. However, you can calculate the average over the lifetime of a repayment mortgage and that is 1/25th or 4%.

TBH, I'm amazed that people are trying to argue an alternative calculation method and being so snooty. There is no way to calculate this other than to average the debt amount over the lifetime of the loan.

RenovationMan

homelessskilledworker wrote: »

And what about those on interest only mortgages, and those put on interest only just recently because they cannot afford the repayment mortgage and in many cases are in arrears.

Todays sellers are sitting tight waiting for the old days to come back, and todays buyers have no choice either way as the lenders are not lending. I have no idea how this is going to pan out, I just know something will give at some point.

Were interest only mortgages still available to first time buyers 12 months ago? For those that were available, how many didn't have stringent checks to make sure that they had repayment vehicles?

the_flying_pig

how long before Hamish completes his about face & starts squealing that Halifax is a far better index than NW?

Dan:_4

homelessskilledworker wrote: »

Todays sellers are sitting tight waiting for the old days to come back, and todays buyers have no choice either way as the lenders are not lending. I have no idea how this is going to pan out, I just know something will give at some point.

Wrong. Lenders are lending

CRASH_BANG_WALLOP

and the dudes have partly blamed the wet weather for it :rotfl:

Graham_Devon

RenovationMan wrote: »

TBH, I'm amazed that people are trying to argue an alternative calculation method and being so snooty. There is no way to calculate this other than to average the debt amount over the lifetime of the loan.

Dunno why you are amazed. You've been arguing based on splitting hair's for the last 6 months with many a poster on here.

If myself, or anyone else you follow around had made the error you did (and you'd have understood it was wrong of course) you'd have overloaded the server with the rolly head icons and spent half the morning wittering away about it over several threads.

IMHO of course. But my humble opinion is correct.

You on the other hand have simply been corrected, and there isn't much to make out of it.