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Debate House Prices
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House price correction - Taking the hard route
Comments
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Obviously, there are still many historical issues which complicate the sale and purchase procedures relating to some properties. But most post-war 'estate' houses have no such complications. The conventions of conveyancing are rooted in a time when property transactions were relatively rare, and the people who lived in the 'smaller' houses were largely unaffected.
TruckerT
As we have agreed on many occasions, bankers have no money of their own; they only lend money out that has in turn been lent to them by ordinary people-in-the-street or ordinary businesses.
So do you think that it is reasonable for ordinary people to lend their savings for 25 years at a fixed rate of interest?
What sort of deal would you strike?
And of course there is no requirement for you to use a solicitor for anything to do with house purchase or sale.0 -
And of course there is no requirement for you to use a solicitor for anything to do with house purchase or sale.
Think your mortgage lender would have something to say about it."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
As we have agreed on many occasions, bankers have no money of their own; they only lend money out that has in turn been lent to them by ordinary people-in-the-street or ordinary businesses.
So do you think that it is reasonable for ordinary people to lend their savings for 25 years at a fixed rate of interest?
People are free to make their own choice - the returns tend to be higher for longer tie-ins.
What sort of deal would you strike?
If I were a wealthy bank CEO, I would have a team of highly-paid advisers. As a penniless ex-truck-driver, I cannot comment, but I would guess that most lenders would be able to find a way to offer a range of products offering different terms and conditions to suit different customers. But there is probably no practical reason why a fixed interest rate could not become the norm.
And of course there is no requirement for you to use a solicitor for anything to do with house purchase or sale.
Try telling that to a mortgage lender...
TruckerT...According to Clapton, I am a totally ignorant idiot.0 -
100,000 mortgage
at 3% costs 473 pm
at 5% costs 578
at 6% costs 636
at 7% costs 693If you are one of the 20% of healthy adults who struggle with basic arithmetic, simple tasks like splitting the dinner bill can be excruciating. Now, a new study suggests that a gentle, painless electrical current applied to the brain can boost math performance for up to 6 months.
http://www.huffingtonpost.com/2013/05/17/math-skills-electric-shock-brain_n_3291817.html0 -
People are free to make their own choice - the returns tend to be higher for longer tie-ins.
TruckerT...
Would borrowers be prepared to pay the premium to reward the depositor?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Would borrowers be prepared to pay the premium to reward the depositor?
As stated elsewhere on this thread, house prices are at least partially decided by mortgage availability and costs. The effects on borrowers of fluctuating interest rates have not been a problem in recent years, but are possibly the next crisis in peoples' personal finances.
I wonder how many people with personal loans know (or care) what rate of interest they are paying. The important figure is the size of the monthly payment.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
If you are one of the 20% of healthy adults who struggle with basic arithmetic.....
.......a new study suggests that a gentle, painless electrical current applied to the brain can boost math performance for up to 6 months
So, based on this then....A 100% increase in mortgage interest rates, from 3% to 6%, would result in mortgage repayments increasing by just 34%.
Are you suggesting that the housing bears counting on base rate rises to crash prices need electro-shock therapy?
Funnily enough, I'd agree.
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
The UK government's Help to Buy scheme is a government subsidy which offers no long term guarantees.
TruckerT...
My understanding is that the Government guarantees part of your mortgage under Help to Buy.The government will provide the lender with a guarantee for up to 15% of your loan, allowing it to offer a mortgage even though you have a small deposit.0 -
All the details of it though are a bit fragmented. Even on what looks to be the official website here;
http://www.helptobuy.org.uk/
The way I see it is that the taxpayer is providing the guarantee to the finance providers.
But the blurb also says that the loan can be repaid at "anytime".
So is anything in place to prevent "anytime" from turning into "never"?
After the interest free five years, 1.75% goes onto the loan, and after that it increases by RPI +1%.
That could soon mount up into an unmanageable debt.
Mind you, I suppose if it were left until the buyer deceased, by that time inflation is likely to have eroded the value of the loan and the long term increase in the house value will provide the government with a tidy profit when they claim their 20% of the estate.0 -
Landprofits wrote: »All the details of it though are a bit fragmented. Even on what looks to be the official website here;
http://www.helptobuy.org.uk/
The way I see it is that the taxpayer is providing the guarantee to the finance providers.
But the blurb also says that the loan can be repaid at "anytime".
So is anything in place to prevent "anytime" from turning into "never"?
After the interest free five years, 1.75% goes onto the loan, and after that it increases by RPI +1%.
That could soon mount up into an unmanageable debt.
Mind you, I suppose if it were left until the buyer deceased, by that time inflation is likely to have eroded the value of the loan and the long term increase in the house value will provide the government with a tidy profit when they claim their 20% of the estate.
There may be many reasons for rejecting help to buy; but a part mortgage deal at 0% for 5 years then 1.75% + RPI doesn't seem to be one of the them.0
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