Is inflation starting to hit the housing market?

IveSeenTheLight

Graham_Devon wrote: »

Every single person who is pro house prices appears to have (or say they have) more than one house. Wotsthat a holiday home in Cornwall. ISTL several houses apparently. Hamish 2 houses, and ready to buy more and it's the best time to buy but he won't buy.

You can choose to consider the words of experience, else close your ears and sing a la la tune.

Don't just listen to us, speak to your elders that you believe in and trust.

Regarding this thread. Write down all the different outgoings you have and ask yourself, if I can fix these costs going forward and hedge against future inflation would I do so, regardless whether it is property, utilities, foods etc etc etc

Graham_Devon wrote: »

Only then can people have a realistic view of the world. I'm not saying mine is realistic. However, I do feel I understand a little more about the cost pressures younger people with a young family are under. Some may disagree.

This thing is Graham, there are the young that are able to do what other have done.
FTBers are at a 5 year high I read recently.

What are they doing that the others you are referring to cannot?

IveSeenTheLight

Graham_Devon wrote: »

I have.

Therefore I know theres quite a few extra costs to my outgoings each month, other thn mortgage and electric / gas.

Sorry. But your calculations are massively let down by only including one single outgoing from family budgets.

Just compare average housing costs (excluding mortgage) to average mortgage costs. Don't take a very large mortgage cost and compare it against one single outgoing. That's plainly stupid.

I'm not backward enough to take your calculations and not question them.

Once again, I tried to keep it simple, yet still you cannot accept the concept.

You say that £100 is massively low, yet have not responded to my quote and link

I could have used £116.66 (£1400/12) or £95 (£1,140/12), but kept simple to a rounded figure.
Is my rounded £100 for example sake "massively low"?

I'll persevere and dig out the typical household costs, prioritisation and ask you again which ones you would fix to hedge against future inflation if you could

Graham_Devon

ISTL, give it up. People face more outgoings than one single item.

Domfrizby

Graham_Devon wrote: »

CML seem to think so.



We starting to see those in the industry now starting to nod towards the cost of living being a problem for "would be" housebuyers?

http://www.bbc.co.uk/news/business-21517934

Yes as cost of living goes up more downward presure on rents and housprices.

The real 50% club are looking more and more like being proved right all along.

We are just over half way throught the real 50% crash in property.

I myself am now joining the real 50% club, I can see in a few more years at this rate property will have crashed 50% or more in real terms.

IveSeenTheLight

IveSeenTheLight wrote: »

I'll persevere and dig out the typical household costs, prioritisation and ask you again which ones you would fix to hedge against future inflation if you could

Ok here we go
http://forums.moneysavingexpert.com/showpost.php?p=58376153&postcount=27

IveSeenTheLight wrote: »

Very Good.
Now, forgetting about the percentages for a second, what would most people priorities lie in order of necessities

For me: -
Food......118
Housing...238
Fuel and light...42
Household services..63 (Not sure what this is for given Fuel and Light are above)
Motoring...137
Clothing and footwear..44
Leisure goods.....36
Leisure services..64
Catering...47
Fares & other travel..20 (Motoring is above)
Household goods..65
Alcohol.....60
Tobacco...28

Taking clothing downwards, that's 36.4% that could be reallocated to higher priority on the list.

So from the above list (remember these are values out of 1000), two questions: -

1. Which of these would you like to fix in order to hedge against inflation?
2. How would you prioritise / re-evaluate your sepnding budget?

IveSeenTheLight

Graham_Devon wrote: »

ISTL, give it up. People face more outgoings than one single item.

I know I should, remember my signature was developed with you in mind, however I am feeling refreshed and enthused to hopefully get you to think a bit more.

We have discussed this in the past and I've given a more details list fo you to consider prioritising your spending and how you would fix costs if you could to hedge against inflation.

Hope this gets you past your first hurdle.

Harry_Boyle

I can't believe people are still trying to get Devon to understand inflation and how fixing certain costs (such as mortgages, utilities or indeed rail season tickets) helps shield you from the effects.

It's so obvious that I can only conclude that he is deliberately being dense in order to either wind people up or to get some attention (probably both).

IveSeenTheLight

Harry_Boyle wrote: »

I can't believe people are still trying to get Devon to understand inflation and how fixing certain costs (such as mortgages, utilities or indeed rail season tickets) helps shield you from the effects.

It's so obvious that I can only conclude that he is deliberately being dense in order to either wind people up or to get some attention (probably both).

Hi, I understand and agree to an extent.
Domfrizby has also showed he is on a similar understand so whilst Graham may not (or display he does not) understand the concept, maybe, just maybe one or two others of similar disposition might see the lightbulb turn on

sabretoothtigger

The correction could occur even if the price did rise 1% a year forever if inflation is higher then that, houses are dropping in value.
Its very hard to judge except in retrospect especially when the cost of the house is second to mortgage costs for most people and that is falling

Just because your wages rise, it does not mean your mortgage payment is easier to pay. To do that, your wage rise has to outstrip your increasing outgoings

Thats a fair point. This is also an argument for why people should definitely try to fix a rate at the current low cost for as long as possible. Most rents are not fixed long term, otherwise that could be an alternative I guess

I know I should, remember my signature was developed with you in mind

Domfrizby

IveSeenTheLight wrote: »

Hi, I understand and agree to an extent.
Domfrizby has also showed he is on a similar understand so whilst Graham may not (or display he does not) understand the concept, maybe, just maybe one or two others of similar disposition might see the lightbulb turn on

Well lets get this striaght then, what is the official definitions of inflation?

Officially inflation was always an expantion of the currency supply. So this happened everytime £50billion was added to the currency supply in recent times.

The effects of inflation are higher prices, but this does not happen right away, adding billions of units to the currency supply just builds up energy, and the effects are seen down the road.

What complicates matters is outstanding revolving credit supply contracting when people pay off or default on more loans than other people take out new ones. This is a contraction of the outstanding revolving credit supply which always used to be officially called deflation. The effects of this contraction should be lower prices, or at least prices not going up for years on end in relation to the ammount of currency created and added to the supply.

So facts show we currently have the effects of deflation in property (Property is going up less than inflation) and rather large inflatrion in other areas like utilites went up 18% and talk is they are going up even more very soon.

So this new word By-flation. Means deflation in property, you are better off holding a pile of cash than property, also your mortgage debt is going up in relation to your property and everything else.

But other things have gone up way more than the official government numbers for inflation, surely know body believes the government numbers any more. Well not many ever did?