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

IveSeenTheLight

Crashy_Time wrote: »

From what has been posted it seems that Edinburgh ticked along at late 90`s price levels until 2002, then the cheap credit flow + Liar Loans added fuel to the Ponzi. However, your example highlights my original argument, prices on these flats have gone nowhere in ten years. People buying back in 2004 would have believed that their investment would have at least doubled.

You'll find that many properties in the UK are sitting at 2004 / 2005 levels post the 2008 / 2009 correction.

The point is however, contrary to your own, these properties are not lower than value than they were 10 / 16 years ago and is a far better financial situation than renting over the same period.

Crashy_Time

ukcarper wrote: »

if some one had bought 81 for £49k in 2002 they would have paid £26k interest if interest only if repayment less.

So if it sells at todays price they would only be fifty quid short?


The problem arises as prices took off after 2002, as those diving into the Ponzi then especially on I.O, are going to come up much shorter.

ukcarper

Crashy_Time wrote: »

So if it sells at todays price they would only be fifty quid short?


The problem arises as prices took off after 2002, as those diving into the Ponzi then especially on I.O, are going to come up much shorter.

I see you have paid £81k rent over the last 17 years that equates to about £51k between 2002 & 2014. So they are £24k plus increase in house price up.

Crashy_Time

IveSeenTheLight wrote: »

You'll find that many properties in the UK are sitting at 2004 / 2005 levels post the 2008 / 2009 correction.

The point is however, contrary to your own, these properties are not lower than value than they were 10 / 16 years ago and is a far better financial situation than renting over the same period.[/QUOTE]


Is it? Even if they went I.O, or MEW`ed? And remember they still have to actually SELL the flat.


Best case, they bought a flat ten years ago for about 70k on a repayment mortgage, they paid rent to the bank for the money for ten years, they now have a flat which is worth about 70k, but they need a buyer to complete the circle?


Worse case; They bought a flat ten years ago for 70k on an I.O mortgage and have been paying to rent the money ever since, and the flat is worth about 70k.


Worst case; They bought a flat for about 70k ten years ago and went I.O because "You never lose with property", then they started MEW`ing because their friends were doing it for holidays etc. and now they are in a financial hole they will never recover from, and the flat is worth about 70k (if they ever find a buyer)

Rota

wotsthat wrote: »

At 17 years into a £71k mortgage at 4.55% someone would have paid £80k on a repayment mortgage and have £43k in equity. Of course your memory of historical prices is rotten so the position in reality is much better for them.

Remind us how much you've paid in the same period and how much equity you have.

All that doesn't matter. Very soon there will this huge crash and the house will be worth 90% less. At which point Crashy still wont buy, crack a beer and have a good old laugh at "the greatest ponzi scheme in history".

Crashy, just remember these aren't even London numbers either. If you start doing compares back to 2004 prices, when you could of bought and didn't (waiting for a crash) you would be crying and wondering why your mates are 200k better of than you, on .54bp above BOE on lifetime trackers, driving brand new Audi's or buying bigger pads.

Renting is a mugs game. Sure its less responsibility and you don't have to think, but you end up with absolutely nothing.

Rota

Crashy_Time wrote: »

IveSeenTheLight wrote: »

You'll find that many properties in the UK are sitting at 2004 / 2005 levels post the 2008 / 2009 correction.

The point is however, contrary to your own, these properties are not lower than value than they were 10 / 16 years ago and is a far better financial situation than renting over the same period.[/QUOTE]


Is it? Even if they went I.O, or MEW`ed? And remember they still have to actually SELL the flat.


Best case, they bought a flat ten years ago for about 70k on a repayment mortgage, they paid rent to the bank for the money for ten years, they now have a flat which is worth about 70k, but they need a buyer to complete the circle?


Worse case; They bought a flat ten years ago for 70k on an I.O mortgage and have been paying to rent the money ever since, and the flat is worth about 70k.


Worst case; They bought a flat for about 70k ten years ago and went I.O because "You never lose with property", then they started MEW`ing because their friends were doing it for holidays etc. and now they are in a financial hole they will never recover from, and the flat is worth about 70k (if they ever find a buyer)

Have you got any reliable stats on how many people MEW? I personally don't know anyone who has done this.

Crashy_Time

ukcarper wrote: »

I see you have paid £81k rent over the last 17 years that equates to about £51k between 2002 & 2014. So they are £24k plus increase in house price up.

If they bought for cash yes, but during that time I have shared houses that were worth 700 -800k with large private gardens. Beats flat living any day, and they still have to find a buyer to realise any gains. Oh, and if you read the links their flat hasn`t increased in price since 2004.


Oh and a serious repair or two could be the best part of 10k, so they are not really a great example of "winning" at life through buying property?

Crashy_Time

Rota wrote: »

All that doesn't matter. Very soon there will this huge crash and the house will be worth 90% less. At which point Crashy still wont buy, crack a beer and have a good old laugh at "the greatest ponzi scheme in history".

Crashy, just remember these aren't even London numbers either. If you start doing compares back to 2004 prices, when you could of bought and didn't (waiting for a crash) you would be crying and wondering why your mates are 200k better of than you, on .54bp above BOE on lifetime trackers, driving brand new Audi's or buying bigger pads.

Renting is a mugs game. Sure its less responsibility and you don't have to think, but you end up with absolutely nothing.

Touch a nerve did I?

ukcarper

Crashy_Time wrote: »

IveSeenTheLight wrote: »

You'll find that many properties in the UK are sitting at 2004 / 2005 levels post the 2008 / 2009 correction.

The point is however, contrary to your own, these properties are not lower than value than they were 10 / 16 years ago and is a far better financial situation than renting over the same period.[/QUOTE]


Is it? Even if they went I.O, or MEW`ed? And remember they still have to actually SELL the flat.


Best case, they bought a flat ten years ago for about 70k on a repayment mortgage, they paid rent to the bank for the money for ten years, they now have a flat which is worth about 70k, but they need a buyer to complete the circle?


Worse case; They bought a flat ten years ago for 70k on an I.O mortgage and have been paying to rent the money ever since, and the flat is worth about 70k.


Worst case; They bought a flat for about 70k ten years ago and went I.O because "You never lose with property", then they started MEW`ing because their friends were doing it for holidays etc. and now they are in a financial hole they will never recover from, and the flat is worth about 70k (if they ever find a buyer)

Still would have paid £20k less interest than you have rent.

Rota

Crashy_Time wrote: »

Ok, he said Mortgage paid off, my mistake, but lets just take his original statement out into the light to examine.


"When a mortgage is paid off the house is worth more than everything you have put in so I don't see the issue. "


Quite a bold assumption if I may say so.

Not a bold statement where I live. In fact, I would say you would be stupid to think otherwise.