House price crash?

JoeK_3

CFC wrote: »

Nowadays people want to pop out kids and move into a really nice house to do so, with mum staying at home, house completely fully furbished and nicely decorated, with central heating and all the works, while still buying nice cars and consumer goods, spend loads at Christmas and being able to take the family out for lunch and dinner and spend cash on booze for a night in/out for themselves. Plus new clothes, designer trainers, foreign holidays and all the trimmings of modern life.

Then they complain.

Nuff said.

And what's wrong with that?

I think we all have a similar story to tell.

Progress is wonderful for those that aspire to it.

JoeK

HugoSP

mystic_trev wrote: »

On the radio yesterday.

Fairview Homes. We'll pay your 5% deposit and your Stamp Duty too........and we'll also give you cashback!

So the House costs you nothing, you get money to go on Holiday or buy a Plasma screen TV. Then all YOU'VE got to do is pay back the mortgage! MADNESS

http://www.fairview.co.uk/general.asp?article=incentives.xml

Stick the cashback on a high interest account and then put it into reducing the mortgage when you can.

kingkano

JoeK wrote: »

And what's wrong with that?

I think we all have a similar story to tell.

Progress is wonderful for those that aspire to it.

JoeK

I think its endemic of society today. People say why should I make sacrifices for anything or anyone. I want the best of everything, plus I want kids. Sort it out so I can. It has never been this way before so why should it now? Progress is not a decent enough answer sorry....

Instead of saving up for something, just stick it on a credit card and worry about it later??

HugoSP

It's all about affordability.

I know of some people that live an expensive lifestyle, depriving themselves of few luxuries, but they can afford it. Their income is greater than their expenditure, and why not IMO?

These are people who have very stressful well paid jobs and the luxuries (cleaner, decent cars etc) probably keep them sane.

However I also know of a few cases where people were taking out loans to curb spending habits that really should have been dealt with by professional councelling. One indiidual I know raked up around £130k worth of debts with an annual salery of around £15k. He was working around 65 hours a week in two jobs. He was lucky for a while in that his overtime was not curbed. No one else wanted to work the house he worked.

At the same time he found ways to buy really useless gadgets, or spend a fortune on rail travel when travelling by car would have cost him a 5th of the cost. People around him, some earning £10k more than him still economised.

nonsensefactory

homer_j wrote: »

Why would it be disasterous for me if the house prices were to crash - more people would be able to buy and I would have more business? Or am I missing something?

If you were right then I would just have to use my other qualification and move into investments or I could draw upon my management experience and go back into that or I could try my hand at something new - I lwould see it as an opportunity personally?

Seriously there would be more hurt if prices were to crash than just me having my trade affected.

A house price crash would be a disaster for everybody and you're no exception. The UK economy is being held together on the back of the biggest credit bubble ever seen and if (maybe when ?) house prices either crash or stop going up, people will no longer be able to use their house to fund their spending, instead they'll have to knuckle down to paying it all back will cut back on everything, causing a downturn, unemployment, repossesions, selling of BTL investments, the list goes on. OK, maybe some people currently unable to enter the market might do so, but if house prices are falling, I guess the greater majority of people currently unable or unwilling to buy won't until they think that any fall in prices has stopped which HAS to affect you as a mortgage advisor hasn't it ?

Melissa177

I agree with Kingkano & CFC, I know far too many people who whine about not being able to afford a house, plus then want all the latest gadgets and holidays (and rack up massive debts in order to fund them). There is nothing wrong with spending money and enjoying luxuries if you can afford them, and you have a good income - but to do this on a credit card, and then whine about not being able to afford a house annoys me.

Redbedhead

It has to come down to peoples priorities and what they prioritise spending their money on.

My H and I are about to take on a significantly larger mortgage (if we can find somewhere we both like to buy:rolleyes: ) and it does scare me. Currently with our mortgage we could survive on one salary, while in a new house we will need 2 for the most part.

We do want kids, so that has been factored in to the calculations as to what we can afford, i.e. we have sufficient savings for me to afford to take at least 6 months off.

However, we don't have a particularly expensive standard of living. We have one small car, we don't have sky, we don't go out every weekend and we don't have lots of gadgets. We do however have at least two holidays a year, often long haul, we like going out for meals and we buy decent food. But those are our priorities. We have both accepted that some of these will have to be knocked on the head if we up the mortgage, although the main thing that will be knocked on the head will be our savings. Currently we save more each month than the new mortgage will cost us, which is why we are both happy to take it on.

I am fed up with getting comments from people (not just on here but in real life) about why don't we buy this, spend that or how can we afford a bigger house. We spend what we want on the things that mean the most to us.

homer_j_3

nonsensefactory wrote: »

A house price crash would be a disaster for everybody and you're no exception. The UK economy is being held together on the back of the biggest credit bubble ever seen and if (maybe when ?) house prices either crash or stop going up, people will no longer be able to use their house to fund their spending, instead they'll have to knuckle down to paying it all back will cut back on everything, causing a downturn, unemployment, repossesions, selling of BTL investments, the list goes on. OK, maybe some people currently unable to enter the market might do so, but if house prices are falling, I guess the greater majority of people currently unable or unwilling to buy won't until they think that any fall in prices has stopped which HAS to affect you as a mortgage advisor hasn't it ?

Where would all the people live if this was to happen?

I am not wanting to sound like I am protected in anyway because I am not- my property value will fall along with everybody elses.

I have taken precautionary steps to fix my mortgage for the next 5 years on the basis that I know that its the ability to repay the debt that counts.

If, or when as you may say, my equity subsides due to house prices falling then my line of thought would not be one of panic and lets sell. It would be to continue paying and to ride it out.

Property has never lost out over a 7 year period (and I know that there is always a first) but surely keeping your mortgage repayments affordable, protecting your income and life correctly will minimise the risk?

There will be a lot of people who will simply be pushed over the edge I am sure if what you say was to happen but I think if you were to think that people still needed a place to live and someone has to own that house so I think my job would be fairly safe. The argument comes down to one of my first posts on here which is that Demand outweighs supply and until that is resolved, I cannot see there being a crash - only a slow down (which is happening right now and will do probably when HIPS come in - and that in itself may make demand rise as supply will lessen due to people not moving).

spurs_nut

paulinuk wrote: »

sooner it crashes the better,its all stupid,what good does these crazy prices do1000s of people can never buy,i came off market sold 1bed flat for £28000 now its a horrendos £96000 mad,i was going to retire to krakow but its gone mad there as well.its a stupid world

Full of stupid people,......... LIKE YOU! :rotfl:

k1mmie

Hi Guys

I am new to this thread, but after having read your views, thought I should put my situation accross.

My husband and I have the large house and three children, (18,14,11). We have the plasma, the Sky HD, etc, etc. Having said that, I am lucky enough that I do not have to work and my husband earns enough to give us all a comfortable standard of living, however we have currently put our house on the market to downsize.

Having reasessed our priorities, I am of the same conclusion as most of you guys. Eventually something has to give. We have therfore decided to move out further and therefore reduce our huge mortgage.

People say you cannot have the gadgets and the luxurious lifestyle, to which I say you can if you are very wealthy. The point is sooner or later, something has to give.

As the children get older, you assume the "needy" items to become less and therefore retain more in your pcket. I, however have found this is not the case. Driving lessons, College fees etc.....

SO, ultimately we are prepared to move, lock,stock and barrel, and reduce our major outgoing and hopefully reap the benefits financially.