Halifax -0.4%.... £159,486

torontoboy45

HAMISH_MCTAVISH wrote: »

Brit, your signature is wrong.

Land registry is PLUS 0.7% year on year.

Poor show, deliberately faking figures like that.....

not that it ever bothered you...

chewmylegoff

Eellogofusciouhipoppokunu wrote: »

Falling house prices are a good thing for most homeowners as it makes it easier to climb the next rung of the ladder.

how does that work?

take the simple example of someone buying a £100k property with a £20k deposit and then five years later wanting to buy a £200k property. assume that they pay off £10k of capital in that five years (this is roughly what you would pay off with a 25 repayment mortgage at 5% interest).

1) house prices stay the same.

sell £100k house for £100k. £30k of equity = 15% deposit for buying next house (which now costs £200k).

2) house prices rise by 25%

sell £100k house for £125k. £55k of equity = 22% deposit for buying next house (which now costs £250k)

3) house prices fall by 25%

sell £100k house for £75k. £5k of equity = 3% deposit for buying next house (which now costs £175k)

so although you would need a smaller mortgage to buy the house in option 3) than in option 2) (£170k as opposed to £195k) you wouldn't be able to get the mortgage.

in reality, rising house prices are better if you want to trade up, because it ensures that you have anough of a deposit to actually get the mortgage that you want.

of course, if you are buying for cash and don't have a mortgage then falling house prices is probably a good thing as you can trade up to the next level for less money.

Eellogofusciouhipoppokunu

chewmylegoff wrote: »

how does that work?

take the simple example of someone buying a £100k property with a £20k deposit and then five years later wanting to buy a £200k property. assume that they pay off £10k of capital in that five years (this is roughly what you would pay off with a 25 repayment mortgage at 5% interest).

1) house prices stay the same.

sell £100k house for £100k. £30k of equity = 15% deposit for buying next house (which now costs £200k).

2) house prices rise by 25%

sell £100k house for £125k. £55k of equity = 22% deposit for buying next house (which now costs £250k)

3) house prices fall by 25%

sell £100k house for £75k. £5k of equity = 3% deposit for buying next house (which now costs £175k)

so although you would need a smaller mortgage to buy the house in option 3) than in option 2) (£170k as opposed to £195k) you wouldn't be able to get the mortgage.

in reality, rising house prices are better if you want to trade up, because it ensures that you have anough of a deposit to actually get the mortgage that you want.

of course, if you are buying for cash and don't have a mortgage then falling house prices is probably a good thing as you can trade up to the next level for less money.

So there are people who tell us that falling house prices are a bad thing for home owners?!! I owe DervProf an apology! (Sorry Derv!)

I'll leave the retort to DervProf as he now has all the amunition he needs. Go Derv!

chewmylegoff

Eellogofusciouhipoppokunu wrote: »

So there are people who tell us that falling house prices are a bad thing for home owners?!! I owe DervProf an apology! (Sorry Derv!)

I'll leave the retort to DervProf as he now has all the amunition he needs. I dare say he'll point out the additional costs over the lifetime of the mortgage for the £75k difference between 25% HPI and 25% HPC, something your examples seem to have forgotten to add. Incidently, at a conservative 5% APR, this adds £312 per month onto the mortgage in interest payments.

I don't want to put words into his mouth though, so I won't take this further....

well, as my maths failed, and the difference is actually £100k as in option 3 the price of the second house would have fallen to £150k - the increased mortgage payments are even greater and the deposit is slightly larger under 3) (3.33% as opposed to 2.8%).

this is all rather academic though as you would not actually be able to trade up because no one is going to give you a £145k mortgage with a 3.33% deposit.

so it is not cheaper to trade up under option 3) because of reduced mortgage payments over the lifetime of the mortgage, it is impossible to trade up.

DervProf

Eellogofusciouhipoppokunu wrote: »

Who told you that it was bad news for home owners?

We'll I'm pretty sure I`ve read or heard the phrase "bad news for homeowners" when a fall in property prices has been reported.

Even if that's just my imagination, I know I`ve heard/read "good news for homeowners" many times when prices used to go up. So I conclude that if rising prices are good for homeowners, then falling prices must be the opposite.

I also know that a few of my friends used to be full of the joys of spring when they found out their house had increased in value by £x000 last month. I tried to explain to them that it would make very little difference to them, but a few thought they were becoming quite wealthy. In fact one particular friend who denied that house prices would ever fall, and if so by not much, is now finding it very difficult to find a buyer, despite reducing the asking price by a substantial amount. She would like to move, but the beloved HPI that she once seemed to celebrate has now caused her a bit of a problem.

47thagent

homelessskilledworker wrote: »

These indcies are of little interest to me individualy, but this one is significant(to me anyway).

Halifax has now entered the £150k's like I thought it would this year, I now expect the LR to be next with the Nationwide to follow kicking and screaming a short while later.

Then(in my opinion) we are going to start chasing the £140k levels again, and when that happens the real acceptance of problems ahead can start being discussed on this board.

They will never get bellow the £150k's, we will be back up to over 160 soon and off again, back to where we were five years ago over 200.

Eellogofusciouhipoppokunu

chewmylegoff wrote: »

well, as my maths failed, and the difference is actually £100k as in option 3 the price of the second house would have fallen to £150k - the increased mortgage payments are even greater and the deposit is slightly larger under 3) (3.33% as opposed to 2.8%).

this is all rather academic though as you would not actually be able to trade up because no one is going to give you a £145k mortgage with a 3.33% deposit.

so it is not cheaper to trade up under option 3) because of reduced mortgage payments over the lifetime of the mortgage, it is impossible to trade up.

As I said, I don't want to put words in Derv's mouth but...


...perhaps it's no bad thing that the example homeowner can't trade up from a £70k mortgage to a *£195k mortgage (as in the case for your 25% HPI gains) or even from a £70k mortgage to a *£140k mortgage (as in the case for your 25% HPC) given that your example guy hasn't had his income increase in the 5 years of home ownership and seems incapable of building any savings over the same 5 years of home ownership. Derv might tell you he's better off staying put than doubling his mortgage debt.

*Caveat: I'm coming up with these mortgae figures using mental arithmatic and so they could be out a couple a quid.

DervProf

Eellogofusciouhipoppokunu wrote: »

Derv might tell you he's better off staying put than doubling his mortgage debt.

Indeed I might, but individual cases obviously vary.

The point I'm making is that the media generally suggest that increasing house prices are a good thing for most. Once in a while they'll highlight the difficulty it is causing FTBers, but often it put down to their inability to borrow enough, rather than HPI itself.

Eellogofusciouhipoppokunu

DervProf wrote: »

Indeed I might, but individual cases obviously vary.

The point I'm making is that the media generally suggest that increasing house prices are a good thing for most. Once in a while they'll highlight the difficulty it is causing FTBers, but often it put down to their inability to borrow enough, rather than HPI itself.

The media sells the daft idea that ever increasing hous prices and therefore ever increasing mortgages is somehow a good thing. Clearly both of us have seen though the illusion, but others are so bought into it that they can't imagine anything else.

shortchanged_2

SIBLEY!! SIBLEY!!

Anyone seen him? Where are 'we' now that prices have been 'allowed' to fall below the £160K mark?