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Price Crash only benefits investors or FTBs?
malko
Posts: 55 Forumite
With all the talk about price crashes i cant really see how one would benefit those of us trying to move up the ladder unless we risk getting off it and renting. If it happens in say 2 year and prices drop by a realistic 20-25% it will just bring prices back down to the level they were at last year (well in this area) and i'd still have to take out the exact same mortgage i am looking at taking out today to move up to the next rung (through only having a small deposit due to reduced equity).Or am i missing the point here 
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Comments
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If you have a house worth £150k today with a £100k mortgage and you want to move to a house worth £250k. If you moved today then you would have to double your mortgage to £200k.
When prices drop by 25% your current house will have fallen in value to £112.5k but the house you want to move to will also have fallen to £187.5k. Therefore you would only need an extra £75k on your mortgage so you would be £25k better-off!0 -
Prices can fall below what they are now.With all the talk about price crashes i cant really see how one would benefit those of us trying to move up the ladder unless we risk getting off it and renting. If it happens in say 2 year and prices drop by a realistic 20-25% it will just bring prices back down to the level they were at last year (well in this area) and i'd still have to take out the exact same mortgage i am looking at taking out today to move up to the next rung (through only having a small deposit due to reduced equity).Or am i missing the point here
Will your salary in 2 years still be the same as now?
You say a realistic 20-25%. I say 40%. I can find people who say 50%.
Will you have a larger deposit in 2 years time?A house isn't a home without a cat.
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It's a recession when your neighbour loses his job; it's a depression when you lose yours.0
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