'We've reached a tipping point' Signs of house price weakness

Crashy_Time

wotsthat wrote: »

You know when properties are on Rightmove it doesn't mean they can't sell - it means they're for sale.

Anyway if you want to sell why not reduce the price - there's plenty spare.

The buyer has spent £47k to fund accommodation costs and built £24k equity. The renter has spent about the same to fund accommodation costs and built £0 equity. The buyer is better off day after day and year after year.

You're blind to the cost of providing housing. You can't see beyond the price of a house and this month's rent.

The "buyer" has 51k debt to pay back with interest, and is probably stuck in a flat they can`t sell for what they borrowed ten years ago. The renter has no debt, multiple years living expenses in the bank, and can move when and where he chooses. And if we are being honest all the people lining up for mortgages in 2004 didn`t dream for a minute that they would have no HPI, none, nada, diddly squat :rotfl:for their trouble ten years later?

Crashy_Time

ChopperST wrote: »

More good news crashy, oh wait...

http://news.sky.com/story/1319064/uk-growth-hits-fastest-annual-pace-since-2007

http://news.sky.com/story/1318960/rents-rise-again-as-home-costs-swallow-income

http://www.theguardian.com/money/2014/jan/16/rents-rise-tenants-outstrip-supply

And meanwhile in the real world, wages are falling and my rent has risen by 50p.m in 17 years.

Blooloo

wotsthat wrote: »

It's been done to death...

Price 2004 £71k/ Price 2014 £75k

25 year mortgage @ 4.55% gives a mortgage payment of £393/ month.

10 years and £47160 later the mortgage outstanding is £51k and the flat's worth £75k.

Depending on which version of your ever decreasing rent I use you've spent between £42k & £48k in the same period, own 0% of nothing and currently reside in an HMO.

Nice one.

timing is important,you are correct. so would you buy in London today with a 100% mortgage? or would you advise caution?

wotsthat

Crashy_Time wrote: »

The "buyer" has 51k debt to pay back with interest, and is probably stuck in a flat they can`t sell for what they borrowed ten years ago. The renter has no debt, multiple years living expenses in the bank, and can move when and where he chooses. And if we are being honest all the people lining up for mortgages in 2004 didn`t dream for a minute that they would have no HPI, none, nada, diddly squat :rotfl:for their trouble ten years later?

Why can't the buyer have multiple years living expenses in the bank? They've not paid any more for their accommodation - perhaps less.

They don't need to sell the flat for what they bought it for to be ahead of the renter.

£24k would fund your rent for about 6 years wouldn't it?

If your victory is that someone might have expected more HPI but didn't get it but they're £24k better off than you doesn't that victory seem a little...hollow?

ChopperST

Crashy_Time wrote: »

And meanwhile in the real world, wages are falling and my rent has risen by 50p.m in 17 years.

You must have a very kind hearted landlord!

System

ChopperST wrote: »

You must have a very kind hearted landlord!

His rent has only gone up £50 but he's moved into progressively worse accommodation.

On the plus side an HMO in Scotland is a low as it goes.

wotsthat

Blooloo wrote: »

timing is important,you are correct. so would you buy in London today with a 100% mortgage? or would you advise caution?

The calculation was one that Crashy proposed because he thought it would prove his point. He obviously hasn't done the calculation himself or he wouldn't keep making a fool of himself. He was probably told by someone on HPC that a 2004 vs 2014 calculation would work in his favour. Blind faith.

Caution is my middle name - yes I always advise it. I'd buy in any part of the UK today without any worry. London I'm not sure because a sudden, sharp crash just after buying would really push out the breakeven. Then again I've been amazed by London prices for three decades, don't have a functioning crystal ball and don't want to rent so if I found a place, had the finance and could afford it I think, on balance, I'd buy.

ChopperST

Out of interest crashy when you say renters "have multiple years of living expenses in the bank"

1. How many years do you have?
2. How do you protect against inflation risk eroding your capital over time?

Blooloo

wotsthat wrote: »

snip
don't want to rent so if I found a place, had the finance and could afford it I think, on balance, I'd buy.

here is the whole raison d'etre for HPC...its about ordinary people being able to make choices about how they sort out their accomodation. The market has been totally financialised by leverage pushers.

Why is it a person on the London average wage of £26K cant find a place, certainly couldnt get finance, and therefore has no choice in the matter of their housing.

I could care less about the few BTL success stories, I considered it in the past myself, long before any of you entered the market, long before you could even go into a bank/building society and ask...they wouldnt have known what i was talking about.

Currently, BTL mortgages have a dishonest tax break on affordability so this immediately prices out swathes of potential buyers outbid by those that can get credit on cheaper terms, and currently unlimited by the recent mmr which owner occupiers are now subject to.

It is this outrage that HPC posters are outraged about. We love our landlords.

wotsthat

Doesn't it seem odd that someone in their forties has several years living expenses in the bank but chooses to live in an HMO with a shared toilet?