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

Pobby

He really has lost it big time!!!!!Mind you his voice craks me up.STRs will not be allowed to stick brollies up there bottoms!!!!!!!!!!!!!

dolce_vita

Shouldn't that be "bwolly", Pob?

:rotfl:

Melissa177

lypsey wrote: »

I have sold to rent for the last 2 years , my only regret is that i sold to early. I live in a fantastic house in the country , which is great for the kids , I save hard and my war-chest is growing despite paying rent.
You have to remember that for every 2 pounds you pay over 20 years a pound of that is interest to the bank
When I sold I thought if property drops 25%-30% if I buy the same house I would have virtually no mortgage. I now believe that house will drop by 50%. The headlines all point to a crash of epic proportions
1) Interest rates up from 4% to 6% (by year end)
2) Average wage 23 k , average house 200k means average borrowing 8 times salary. This is a record and normally averages 3.5 times
3) You can see that the total repayments of interest on mortgages and debts is now higher than in the last crash
4) Inflation totally out of control
5) Record oil prices
6) Food , council tax etc rising at a much faster rate than wage increases
7) The average age of the FTB'er is now 32ish
8) BTL muppets are now in deep s££t and the sums do not add up after several rate increases . A decade ago there were 70,000 BTL mortgages , today there are 850,000 , a lot of people are now using it as there pension and the BTL guys exiting the market will cause one of the biggets crashs in history
I would like anyone in any major city to show me how the sums add up on btl today , there are no FTB'ers so therefore who is going to be the bottom rung of the ladder
Something has to give and when it starts it will be BIG

Thanks for the replies to my question - I'm don't agree with you about the interest equation, however. I may be paying money to my bank in interest, but if I was renting, I'd just be paying someone else's interest.

I personally don't think there is going to be a crash. The housing market in the UK (especially London) is tight, and I don't see it easing off. You have demographic and immigration pressures.


As an aside...

I wouldn't STR, but I certainly wouldn't come on here and start !!!!!ing at someone else who has - it doesn't make sense to whine about someone else's decisions, it's not like they are affecting you. (Not in reply to post quoted above - just a general observation about some posters on here!)

Melissa177

dolce_vita wrote: »

Have you seen his latest offering?

uploaded 13 mins ago.

http://www.youtube.com/watch?v=aejBR1Z2s8g

This guy has a serious mental illness.

What is wrong with this guy?

daisyroots_2

Your original question was will there be a crash or just a levelling out. I think a levelling out, because apart from any other considerations, we have a housing shortage in this country. More households are created every day for all kinds of reasons - for example - a single dad has just bought a 3 bedroomed house in our street, because he has his son to stay most weekends. His ex also has a three bedroomed house - their divorce has just doubled the amount of housing that family wants.

We all want more space now, and those of us who can afford it, are buying it. The law of supply and demand will be a factor in the housing market until more houses are built - a good while yet

mybrainhurts

Melissa177 wrote: »

Seriously, how many STRs are there out there?

I know of no-one who has sold their house to rent instead.

I have kind of STRed; that is, like a previous poster, sold for other reasons and then decided to rent rather than immediately buy again. So I have redefined myself as SFORATDTRRTIBA, partly to escape the fate predicted for STRs here
http://www.youtube.com/watch?v=aejBR1Z2s8g

I think STRing simply as an economic ploy is very brave - I wouldnt do it partly because I am far too lazy. I am very happy if the market flatlines for years - falls, within reason, would be a bonus. Without wanting to raise issues best debated on other forums, I think price falls of more than 10% are unlikely to occur and if they did occur would not happen in a vacuum - ie that if prices fall 50% the average joe's buying power would likely fall even further because of recession/job loss/inflation/whatever, even if he had STRed at he right time.

Turnbull2000

Cheap and excessive credit has been a major factor behind UK
house price inflation. Should this supply dry up, then the mortgages required to buy over-valued properties will not be available. There's no denying this would have a detrimental affect on the market.

Seems the US may be the first to feel the pain as the global debt/asset bubble unwinds. This is the current headline on MSNBC;

Stock Plunge - Dow closes down more than 280 on fear of possible 'credit crunch' Unemployment rate edges up.

http://www.msnbc.msn.com/

Here's a few more from around the web...

CONCERNS GROW OVER CREDIT TURMOIL ON WALL ST
By David Wighton in New York and Paul J Davies in London
http://www.ft.com/cms/s/560c776a-41e7-11dc-8328-0000779fd2ac.html

CREDIT MARKET TURMOIL EFFECTS MAY LAST YEARS
By Adam Jones in Paris
http://www.ft.com/cms/s/66c9d0de-411a-11dc-8f37-0000779fd2ac.html

TEMPUS COMMENT: CREDIT CRUNCH LOOMS
Grainne Gilmore
http://business.timesonline.co.uk/tol/business/money/borrowing/article2192814.ece

LENDERS GET TOUGH ON DEBT-RIDDEN BRITAIN
Andrew Ellson
http://business.timesonline.co.uk/tol/business/money/borrowing/article2192769.ece

US HOUSING BUBBLE WAS WORST IN HISTORY, JIM ROGERS WARNS
By Richard Blackden
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/03/bcnrog203.xml

HIGH COST OF LIVING MAY SLIP OUT OF OUR CONTROL
ALF YOUNG
http://www.theherald.co.uk/features/featuresopinon/display.var.1592976.0.0.php

ALARMING RISE IN REPOSSESSIONS
by Gill Montia
http://www.financemarkets.co.uk/2007/08/02/alarming-rise-in-repossessions/

franklee

Melissa177 wrote: »

I'm don't agree with you about the interest equation, however. I may be paying money to my bank in interest, but if I was renting, I'd just be paying someone else's interest.

What does it matter whose interest you are paying? What matters is the actual amounts involved in each case (not forgetting the interest your deposit could be earning).

With current rental yields renting is cheaper than the mortgage interest plus lost deposit interest. Rental yields round here are 4 to 4.5%. Interest on savings is around 6%, mortgage rates have gone up. Ain't rocket science.

Fact is my landlord has to chip in on top of the rent I pay just to meet the interest payments on his mortgage. It suits me because if I were to buy the house the mortgage interest payments would be more than the rent. So I'd have to pay more just to stand still.

The only reason buying may be better is any capital gains made and I think those days are numbered. Still if my landlord is happy betting on getting a decent capital gain while losing on the monthly payments then good luck to him but isn't that the very definition of a bubble

Melissa177

franklee wrote: »

What does it matter whose interest you are paying? What matters is the actual amounts involved in each case (not forgetting the interest your deposit could be earning).

With current rental yields renting is cheaper than the mortgage interest plus lost deposit interest. Rental yields round here are 4 to 4.5%. Interest on savings is around 6%, mortgage rates have gone up. Ain't rocket science.

Because the interest is going to eventually net you a house that you own 100% of in 25 years time?

If you rent for 25 years, at the end of the 25 years, you still don't have an asset.

m00m00

Melissa177 wrote: »

Because the interest is going to eventually net you a house that you own 100% of in 25 years time?

If you rent for 25 years, at the end of the 25 years, you still don't have an asset.

if you are on an interest only account without a suitable repayment vehicle as many people are, then at the end of 25 years, you still might not have an asset, at best you may only have a share of one. Whereas if rent is less than the interest on a mortgage, if suitably invested it could ultimately yield a higher return at the end of the period, entirely dependent on long term house price inflation.

In an ideal world, owning your own house should always be the right move, but it's far from an ideal world where house prices are concerned at the moment. Some people are making very expensive mistakes in jumping on the ladder at all costs, usually while repeating the mantras that property only ever goes up, and renting is dead money.