Who'd vote for lower house prices? Not many...

Emy1501

chucknorris wrote: »

You wouldn't let it lie (with Vic Reeves accent) would you. Ok then, lets go on forever with this. There is no 'if prices stay the same or fall' comaparison, we are living in real time so we have to deal in real time. If you have to move in the next few months you are far better off having 150k equity than 50k. If you can't see that there is no hope for you.

I'm off to the bowls club now no doubt we will continue this pointless debate when I get back and see your pointless response.

Your missing the name of the thread. Of course if your moving in the next few months then having 150K equity is better than 50k but thats not whats the threads about.

Its about who would vote for lower prices and also I was refering to being able to access equity in the house. Which for most is not possible.

Also not sure why you keep responding to the pointless posts.

I assume this is a debate forum but it seems that for you its only a debate forum if your point is agreed with.

ILW

the_flying_pig wrote: »

i'm sure this debate has been covered fairly amply in previous discussions.

for current homeowners:

the most obvious case of an owner who'd benefit hugely from house price falls is someone who:

1 - has low LTV outstanding on their current home;
2 - is a prospective upsizer;
3 - has a large number of children & cares about their welfare; and
4 - owns one home only.

the most obvious case of an owner who'd benefit hugely from HPI are:

1 - someone who's a multiple homeowner;
2 - has high LTV on their current home;
3 - is a prospective downsizer or seller-upper; and
4 - has no kids, or else kids whose welfare they're uninterested in.

most other cases fall somewhere between these very polar extremes. the interests of plenty of middling cases might be so much inbetween that flat prices would serve their interests best.

a) any landlord who owns multiple houses will benefit greatly from HPI, regardless of other considerations;
b) almost any prospective upsizer who has low LTV willl benefit from house price falls;
c) almost any low LTV owner with lots of kids & who values their own & their kids' net worth equally will benefit from house price falls;
d) almost any prospective downsizer or seller-upper who isn't worrying about offspring will benefit from HPI.

All these examples refer to owners. Do potential owners and renters not vote?

ukcarper

the_flying_pig wrote: »

i'm sure this debate has been covered fairly amply in previous discussions.

for current homeowners:

the most obvious case of an owner who'd benefit hugely from house price falls is someone who:

1 - has low LTV outstanding on their current home;
2 - is a prospective upsizer;
3 - has a large number of children & cares about their welfare; and
4 - owns one home only.

the most obvious case of an owner who'd benefit hugely from HPI are:

1 - someone who's a multiple homeowner;
2 - has high LTV on their current home;
3 - is a prospective downsizer or seller-upper; and
4 - has no kids, or else kids whose welfare they're uninterested in.

most other cases fall somewhere between these very polar extremes. the interests of plenty of middling cases might be so much inbetween that flat prices would serve their interests best.

a) any landlord who owns multiple houses will benefit greatly from HPI, regardless of other considerations;
b) almost any prospective upsizer who has low LTV willl benefit from house price falls;
c) almost any low LTV owner with lots of kids & who values their own & their kids' net worth equally will benefit from house price falls;
d) almost any prospective downsizer or seller-upper who isn't worrying about offspring will benefit from HPI.

What about the homeowner with good LTV who cares about his children but those children are in negative equity or have a very high LTV.

Graham_Devon

chucknorris wrote: »

You don't have to downsize, you (or others) may simply move house. But lets end this now, honestly I can't go on trying to explain that it is better to have 150k than 50k any longer (there are only so many ways you can say it). I don't see the point in going on (and on and on and on).

Obviously having 150k rather than 50k is a better position to be in.

No one is arguing that. What people are arguing is that you are talking about moving houses.

At that point, if HPI has provided you with 50k equity it will be cheaper all round to buy the next house than it would be if HPI had been 3x higher and provided you with 150k equity.

Reason? Say you bought your original house for 100k, and it's now worth 150k.

Next house has increased from 150k to 225k. (50% increase) leaving a 75k shortfall. 75k is the size of the new mortgage.

If on the other hand HPI had been 150%, your original house would now be 250k, giving you 150k equity. However, the house you are moving to is now priced at 375k, leaving a 175k shortfall.

175k is the new mortgage on the new house. Your extra 100k equity, has cost you precisely 100k MORE than having 50k equity. That's where net worth isn't the be all and end all.

It's cheaper to buy the next house therefore, with lower HPI and a lower net worth as a result of lower HPI.

If you are just asking "what's worth more, 50k, or 150k, then the answer is obvious, but you are not, you are relating it to moving.

Edit: I now see you are using real time only, but using gains from the past. So all I have said doesn't really apply. If you want to use real time, you really have to start with nothing. Otherwise you are excluding past performance, but including the gains. Which is probably where the confusion lies.

the_flying_pig

ukcarper wrote: »

What about the homeowner with good LTV who cares about his children but those children are in negative equity or have a very high LTV.

your post [with an obvious HPI cheerleader's slant BTW - in terms of helpfulness it's roughly on a par with adding 'what about as-yet unborn grandchildren?' to all of the above] gets into unecessary, complications.

e.g. what about an octogenerian who rents [so possibly indifferent], has a 60 year old daughter who owns outright but is looking to use her retirement lump sum to move to a more expensive area [so pro-HPC] & has five grandchildren, one of whom's a BTL landlord [so pro-HPI], but the other four [etc]?

my simple list of categories gave a flavour of all the main motivations that are at work. personal circumstances may involve many different permutatiosn of them.

i suppose that on balance the person who you describe might hope for flat prices.

wotsthat

Graham_Devon wrote: »

Edit: I now see you are using real time only, but using gains from the past. So all I have said doesn't really apply. If you want to use real time, you really have to start with nothing. Otherwise you are excluding past performance, but including the gains. Which is probably where the confusion lies.

'Real Time'? What are you talking about?

People downsizing now in 'real time' are transferring some of their net worth from an illiquid asset (house) to a liquid asset (cash) then buying another illiquid asset (smaller house) leaving £100k to spend.

Net worth=net worth and liquidity=liquidity.

The question is whether or not anyone cares about the contribution that housing gains make towards their net worth and whether it affects their vote. The confusion is arising because rather than just say "no" some seem to be implying that net worth is an abstract concept barely worthy of consideration.

ukcarper

the_flying_pig wrote: »

your post [with an obvious HPI cheerleader's slant BTW - in terms of helpfulness it's roughly on a par with adding 'what about as-yet unborn grandchildren?' to all of the above] gets into unecessary, complications.

e.g. what about an octogenerian who rents [so possibly indifferent], has a 60 year old daughter who owns outright but is looking to use her retirement lump sum to move to a more expensive area [so pro-HPC] & has five grandchildren, one of whom's a BTL landlord [so pro-HPI], but the other four [etc]?

my simple list of categories gave a flavour of all the main motivations that are at work. personal circumstances may involve many different permutatiosn of them.

i suppose that on balance the person who you describe might hope for flat prices.

Just posted because you implied that almost any person who cares about their children would be against hpi things are never as simple as you make out and how you can conclude that I am cheering hpi only shows how blinkered you are.

I agree that person would probably hope for flat prices or at least prices increasing below inflation and wage inflation.

chucknorris

Emy1501 wrote: »

Your missing the name of the thread. Of course if your moving in the next few months then having 150K equity is better than 50k but thats not whats the threads about.

What you are missing is that we were talking specifically about 'net worth' threads do stray into other areas you know.

Its about who would vote for lower prices and also I was refering to being able to access equity in the house. Which for most is not possible.

You can't vote where the market will go, it is not impossible, the equity is accessed when the house is sold.

Also not sure why you keep responding to the pointless posts.

I'm not sure why you keep making them.

I assume this is a debate forum but it seems that for you its only a debate forum if your point is agreed with.

No its just hard to debate with illogical people talking nonsense.

chucknorris

Graham_Devon wrote: »

Edit: I now see you are using real time only, but using gains from the past. So all I have said doesn't really apply. If you want to use real time, you really have to start with nothing. Otherwise you are excluding past performance, but including the gains. Which is probably where the confusion lies.

Why do I have to start with nothing? My current equity is real and can be used as I see fit. So If I wanted to move to Bath from Surrey, I could sell my house in Surrey take out all of the equity (based on past gains) and use it as a deposit towards/or buy outright the house in Bath.

the_flying_pig

ILW wrote: »

All these examples refer to owners. Do potential owners and renters not vote?

renters' incentives are fairly straightforward. concerns about other family members etc aside:

• renters who plan to always rent no matter what - mostly indifferent;
• renters who'd like to buy - clearly have very a strong vested intersest in falling prices.