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

HAMISH_MCTAVISH

khards wrote: »

Hi ladies, has the tipping point been reached?

:hello:

Welcome.

HAMISH_MCTAVISH

khards wrote: »

Can anyone here anser a newbies question?

Sure.

If high house prices are caused by a shortage of a million homes, then why did prices fall in 2008, 2009, 2010, 2011 and 2012?

They didn't. (they fell in some, but not all, of those years)

Now maybe you can answer my question....

If high prices are caused by lax lending, why is it that prices have reached a new peak when the number of mortgage approvals is still little more than half the long term average, I/O is virtually non-existent, self cert is banned, mortgages are being stress tested to 7% rates, and the average FTB is paying less than 3.5 times income and putting down 16% deposits?

Crashy_Time

khards wrote: »

Can anyone here anser a newbies question?

If high house prices are caused by a shortage of a million homes, then why did prices fall in 2008, 2009, 2010, 2011 and 2012?

BECAUSE THEIR ISN`T A SHORTAGE OF HOMES........! Just too much cheap credit and false sentiment about property always increasing in value leading to too many people hoarding multiple property. A large scale property crash will restore equilibrium.

Crashy_Time

ukcarper wrote: »

If you are on a repayment mortgage which most people are you are paying for property.

No, you are repaying a debt secured on a property, which may or may not be worth more than the debt and interest payments in the future.

wotsthat

khards wrote: »

Can anyone here anser a newbies question?

If high house prices are caused by a shortage of a million homes, then why did prices fall in 2008, 2009, 2010, 2011 and 2012?

Those years were absolutely normal, run of the mill and don't stand out as out of the ordinary in any way whatsoever. Good point and welcome.

HAMISH_MCTAVISH

Crashy_Time wrote: »

BECAUSE THEIR ISN`T A SHORTAGE OF HOMES........! .

Awwww..... Bless.

It'd be even cuter if you could spell.

Now here's what the credible people have to say about a shortage....

The country faces a large and accumulating shortfall between the homes we need and the houses we are building – of approximately 100,000 to 150,000 homes a year. If we remain building at current levels, we build a million fewer homes than we need every seven years.
~ Shelter.

Britain is heading for a property shortage of more than a million homes by 2022 unless the current rate of housebuilding is dramatically increased.
~ Joseph Rowntree Foundation

ukcarper

Crashy_Time wrote: »

No, you are repaying a debt secured on a property, which may or may not be worth more than the debt and interest payments in the future.

You bought property with debt you are now repaying debt therefore paying for house it doesn't really matter if the house is worth less that the debt (which is unlikely after 25 years) as you own it.

Jack_Johnson_the_acorn

Crashy_Time wrote: »

It`s a gag, but my communication via the keyboard so far has injected more emotion into this thread than the whole of MSE has experienced in the last year. IMO. Software engineer is good, you shouldn`t really be worried about the price of houses?

Crashy, I'm 28, and I'm 8 years away from owning my house outright, I have to presume that you are in your 40's as you have rented for at least 17 years..... You keep calling people with mortgages muppets but check out this scenario.....

It's DEC 2011 I'm 25yrs old wanting a place of my own. I have saved £15k. Now I can invest in property and pay £100 less a month than it would cost to rent (mortgage term 25yrs).... or can I pay the extra £100pm in rent for possibly the next 50 yrs till I die.....

What decision do I make..... :idea:

What

Thrugelmir

Jack_Johnson_the_acorn wrote: »

To answer ......The value of a house is what someone is willing to pay for it.....

Is able to pay for it. People go to extraordinary lengths to borrow every last £ when it comes to mortgages. So so foolish.

System

Crashy_Time wrote: »

It`s a gag, but my communication via the keyboard so far has injected more emotion into this thread than the whole of MSE has experienced in the last year. IMO. Software engineer is good, you shouldn`t really be worried about the price of houses?

Hah, probably.

It's ok. Not exactly surgeon levels.

I'm not worried about house prices. I'll be honest with you (cos I'm polite like that and my post history would give it away anyway), I was worried 6-7 years ago, but not now. Since then me and the Mrs have doubled our incomes and halved our debts.

I do find the topic pretty interesting though, but threads like this really amuse me. If you told me there'd never be more drama like this I'd probably unfavourite the place.