how many REALLY think there'll be a crash rather than a stabilisation ?

Bestthingsinlifearefree

saunaboy wrote: »

Just been on housepricecrash.co.uk, I get the impression that they all are wishing for a real catastrophic crash.

quote]

Those guys on that site are totally bonkers they have been "predicting" a crash every year since 2003 !! No one takes then seriously but it's a good site for a laugh.

carpetbelly

Guy_Montag wrote: »

Assuming you plan to stay in the same area how are you going to move up the ladder? If your £100k house increases by 50%, you get a whopping £50k for your troubles - but if the (currently) £200k house does the same, it'll be 100k more expensive. So instead of needing £100k to move up the ladder, you'll need £150k. From where are you going to get that extra money?

Well, this is where needing to be sensible comes into play. Other investments. I'm lucky in my role that I have great opertunities to progress up the ladder to some nice jobs with excellent salaries or if I wished in a couple of years I could go off contracting and still make a nice salary. I'm still young enough to do this.

I saw my father go through similar when people fired similar questions off at him. Now he has his nice house worth £250k and his house in london which he rents out worth at least the same.

Why? What do you expect to do? Wait for a crash to happen? Then sit on a house till you sell high then rent out again and wait for that to happen again? <-- too much like hard work. I'm happy with looking at my place as somewhere to live and not an investment. Hence why I'll be happy if I make money from my house, not looking at buying/selling to make money.

devils_advocate

carpetbelly wrote: »

Well, from my point of view I just don't see a crash happening. Maybe a slight correction at some point but I don't see a full on crash.

Also, interest rates are still relatively low. People compare this to the boom and bust of the 80s. Werent the interest rates then around the 15%+ mark? Slightly different to now to say the least!

Yes, but in the last year interest rates have risen from 4.5% to 5.75%. Thats a 27% increase. (In other words, the amount of money you can borrow for the same monthly repayment has decreased by 22%! In a year!

phlash

Bestthingsinlifearefree wrote: »

saunaboy wrote: »

Just been on housepricecrash.co.uk, I get the impression that they all are wishing for a real catastrophic crash.

quote]

Those guys on that site are totally bonkers they have been "predicting" a crash every year since 2003 !! No one takes then seriously but it's a good site for a laugh.

I'm almost afraid to tell you that it is very short sighted to right off sound reasoning and insanely in depth research/discussion on the basis that it hasn't happened yet.

As for people talking about supply and demand, there are enough houses about, we pretty much all live in one don't we? It must therefore be how they are distributed that is the problem, and that is where speculative investment comes in, making it look like a 'lack of supply'. Loosely termed, its true, but when the speculators dissappear which is becoming more apparent, then there will be plenty of supply. Besides, last time I checked rightmove, I'm pretty sure I returned 100's of results within 1/2 mile of where I'm living, so of course there's a huge lack of supply! :rolleyes:

saunaboy

big differences in opinion like I expected.

for what it's worth, I can see a slight drop but not 30%. This would prevent most, if not all of my friends moving.

For a start, the banks would be well and truly on the receiving end of any crash & mass reposession surge. The Mrs works for a big high street lender (in the mortgage dept) and she's seeing many people panicking now. But these are the plonkers who've racked up 40k on Visa cards and decided to take advantage of some imaginary wealth they've been given. And while they're at it they've had a nice holiday.

I can see interest rates hitting 6 or 6.25%, and just the top % of unfortunate people who have been mis-sold mortgages will lose out.

I also think that then we'll see the banks offering long term deals pitched to attract fearful owners, offering some degree of security & they'll then be tied in for 10 years to a single lender with massive get out penalties.

phlash

Carpetbelly, the 15% interest rate argument holds no water, and has been put to death on several occasions on many different sites. Sit down with a calculator for a couple of minutes, and work out why.

saunaboy

carpetbelly wrote: »

Hence why I'll be happy if I make money from my house, not looking at buying/selling to make money.

spoken like someone who bought a while ago !!!

It's losing money that's worrying people mate...

There seems to be a culture where making 30k profit instead of 60k is seen as losing money. This isn't, its making less money.

phlash

saunaboy wrote: »

big differences in opinion like I expected.

for what it's worth, I can see a slight drop but not 30%. This would prevent most, if not all of my friends moving.

For a start, the banks would be well and truly on the receiving end of any crash & mass reposession surge. The Mrs works for a big high street lender (in the mortgage dept) and she's seeing many people panicking now. But these are the plonkers who've racked up 40k on Visa cards and decided to take advantage of some imaginary wealth they've been given. And while they're at it they've had a nice holiday.

I can see interest rates hitting 6 or 6.25%, and just the top % of unfortunate people who have been mis-sold mortgages will lose out.

I also think that then we'll see the banks offering long term deals pitched to attract fearful owners, offering some degree of security & they'll then be tied in for 10 years to a single lender with massive get out penalties.

So because most of your friends wouldn't be able to move if prices fell 30%, you think thats a valid reason they won't? Who are your friends? Are there 9 of them and they all meet up once a month?

Ahh yes, the old "I can see rates going to x% but no higher". Hang on, if we back track 12-16 months ago, were people not saying that the peak would be 5%....then 5.5%....and oh low and behold....6.25%.

If anything, your reasoning sounds like wishful thinking, rather than any researched and prepared opinion.

carpetbelly

devils_advocate wrote: »

Yes, but in the last year interest rates have risen from 4.5% to 5.75%. Thats a 27% increase. (In other words, the amount of money you can borrow for the same monthly repayment has decreased by 22%! In a year!

You really think interest rates will carry on like that?

The amount of money you can borrow depends on more factors than just interest rates. Yes, if you want the same monthly repayment then yes, you cannot get the same amount but then increase the term? Do something inventive, speak to the lender, there are plenty of options now adays to make things affordable even for those sums of money.

phlash

carpetbelly wrote: »

You really think interest rates will carry on like that?

The amount of money you can borrow depends on more factors than just interest rates. Yes, if you want the same monthly repayment then yes, you cannot get the same amount but then increase the term? Do something inventive, speak to the lender, there are plenty of options now adays to make things affordable even for those sums of money.

Would you like to clarify how much more inventive the lending market could get???

That stage has been and gone, they've been propping up the market with inventive schemes for too long now, there's not much trickery left!

Worst Mortgage burden in history: http://news.bbc.co.uk/1/hi/business/6287982.stm
Sub-Prime lending growing:
http://news.bbc.co.uk/1/hi/business/6288738.stm
(Just some recent stories plucked from BBC, not even hard to find)

We all know what sub-prime has done/is doing to the American market.

Out of interest, read this little gem as well:
http://www.thisismoney.co.uk/investing/article.html?in_article_id=422221&in_page_id=166