Crash postponed?

Generali

RHemmings wrote: »

In the UK you can get an interest only mortgage without bothering about a repayment vehicle. That's an infinity year mortgage, but still people can't afford it.

I don't think this is the case (e.g. link).

If you decide that you are prepared to accept this risk we will only give you an interest-only mortgage if:

• you have a suitable repayment vehicle, such as an ISA or endowment policy

• you are prepared to sell your house at the end of the mortgage term to repay the debt. If this is the case you will need to have at least £150,000 equity in your existing property and we will only lend you 66% of the property value

• you intend to sell a second property to repay the loan. The equity in the second property must be at least 120% of the new mortgage amount it is intended to cover

I think most people are using these mortgages in the way you imply though.

I wonder a what point people will start to panic about paying these off. It's going to be pretty embarassing for them if this bubble has burst and another one hasn't taken it's place - can't refinance, can't sell to pay off the mortgage.

HenryWeston

baby_boomer wrote: »

Crash postponed?

Not likely, You have a BOOM then you will have a BUST guaranteed, the hard part is knowing when the bust will come

Jonbvn

BTman wrote: »

You are just a silly old man who has learned nothing throughout your life except how to sit on a property and watch the price grow.. I take great pleasure in the thought that you will probably be dead soon....

Wishing death on anyone, on any forum is totally unacceptable. :mad:

I have reported your post.

baby_boomer

Jonbvn wrote: »

Wishing death on anyone, on any forum is totally unacceptable. :mad:

Thank you.

It does suggest that BTman may possibly be incapable of rational discussion on house prices.

Ironic for someone who incorrectly accuses others, with absolutely no evidence, of having a vested interest in a subject. I've lost count of the casual / malicious errors he has made when referring to my personal situation. Nor could I care twopence about those comments, except that they so clearly breach site norms.

My own interest is purely academic. I'm not going to gain or lose much in practice if the wretched prices soar or plummet. My only property "investment" is my recently purchased home where I intend to live for the next ten years at least.

My initial comment admttedly included one provocative and unnecessary sentence , partly in order to stimulate discussion, but at no stage in this thread have I personalised any argument as this is acknowledged bad practice.

And the Times' own headline was clearly controversial. It needed a factual rebuttal, which many members of this site have properly sought to supply .

For those property bears out there, the Saturday Telegraph Property editor is convinced that the slowdown is underway.

"even if rates don't head all the way to 6%, as many economists expect, this summer will not be a hot one for housing."

And just to pour a little cold water on the "generational conflict" issue which developed on the thread. Assuming that wages continue to outperform inflation & technological innovation continues to transform our world (which it will), each new generation will have some other advantages to help offset perceived housing disadvantages.

Who would choose to be a baby_boomer rather than an 18 year old today ?

BTman

OK, I apologize for the above comment.:o
Your "provocative" comment did provoke me, and I had downed a few beers.. (no excuse I know..)
I never "wished death" upon any individual, I merely stated that I would take pleasure in your "generation" (the boomers) dying soon, thus giving my generation some access to the wealth of assets/property that your generation have acquired very easily over the course of your lives.
It's a shame that 40% of the assets you boomers have gained will be taken back by the government in the form of inheritance tax and never be of gain to your kids..
It gets me down knowing that had I been born ten years earlier then I would probably be sitting on 80K-100K equity by now.
But as an average earner in the SE I can not afford to buy a 2/3 bed property for my family, and you come along bragging about the fact that you can sit back smugly..;)
I still think prices will drop sharply in the next couple of years as FTB are pretty much priced out and as soon as BTL becomes inviable due to high interest rates, low rents and credit tightening then the market will drop, it has to...
Once again, sorry for the nasty comment.

baby_boomer

Apology accepted. I'm sure we can debate productively in future.

Since my first ever house cost £300K and I'm not in a high earning job, I can further assure you that my property was not "acquired very easily".

But the drop in prices you hope for would not be a bad thing.

BTman

Fair comment, maybe I read your situation wrong... (but you call yourself baby_boomer)?
Boomers to me are the generation that has had the lot given to them on a plate.
They are the generation that now own 300K+ properties, bought using a single factory workers salary, right to buy, etc.. with the women staying at home to bring up the kids, talk about easy life...;)
Then to top it off the boomers buy up all the cheap FTB stock and profit from renting it to each others kids? (there is no shortage of housing..)
What hope has the average earner with a family in the SE got of buying a suitable sized property..

ManAtHome

baby_boomer wrote: »

Assuming that wages continue to outperform inflation & technological innovation continues to transform our world (which it will), each new generation will have some other advantages to help offset perceived housing disadvantages.

Who would choose to be a baby_boomer rather than an 18 year old today ?

Unfortunately wages are now under-performing inflation, and technology may be more of an aid to exporting service-sector jobs.

I am a "baby boomer" - although the idea of an extra 30-odd years being tacked on appeals, I think the currently-teen generation will have a much harder time (don't get me started on the "miracle economy"...).

nearlyrich

I think a lot of young people don't realise that these really cheap houses some of us own were actually quie a struggle to pay for at first, it's all proportional. My ex OH and myself decided against a house costing £17k in favour of one costing £8.5k so we could still afford to eat etc.We earned about £5000 between us, he worked nights as a labourer in a factory and I worked at the unemployment office as a junior civil servant.
I have children who will be looking at property purchase in the next few years and I appreciate it's hard but they all have cars, expensive holidays and buy clothes and other expensive stuff. Saving up to get married/buy a house involved some sacrifices and I really think that's the difficulty, there is a sense of entitlement to the finer things in life these days.

wibble68_2

nearlyrich wrote: »

I think a lot of young people don't realise that these really cheap houses some of us own were actually quite a struggle to pay for at first, it's all proportional.

I agree that on the whole it's always been hard to buy your first house.

Where as in the past house prices were more in line with wages, that was offset with higher interest rates, which made it just as much a struggle as nowadays.

The problem I see with the current climate is that people are borrowing huge amounts of money relative to their wages. I see this as a no win situation.

I say this because if inflation takes off then higher interest rates will cause people to be in the sh**.

Alternatively, if inflation stays low for many years to come, then the huge amounts being borrowed to get on the mythical ladder, will not get eroded as quickly as it did in the past.

So future generations will struggle for a lot longer than their parents did.