Fear of a HPC

cells

Graham_Devon wrote: »

You only need to look at the amount of suicides after bankruptcy to note that it's not something to gamble flipantly on.

theoretically it is a gamble with a minor downside and a major upside

Short of a >25% HPC you would never need to go ahead with the downside.

How frequent are 25% HPCs? 1 in 20 years?


anyway its what I would probably do if I had only a 5% deposit. I would not let HPC fears put me off as not buying is also a risk. For everyone else do as you please.

ruggedtoast

I couldnt afford to live in my street now. Prices gone silly, boomers are jumping up and down.

Cornucopia

ruggedtoast wrote: »

...boomers are jumping up and down.

Isn't that quite good at their age?

Cornucopia

cells wrote: »

theoretically it is a gamble with a minor downside and a major upside

Short of a >25% HPC you would never need to go ahead with the downside.

How frequent are 25% HPCs? 1 in 20 years?


anyway its what I would probably do if I had only a 5% deposit. I would not let HPC fears put me off as not buying is also a risk. For everyone else do as you please.

I think your logic is sound, but the bankruptcy element is an unnecessary and controversial extension to it.

One of the ways in which the HPC/Property Bears' logic is flawed is that it is all self-focussed. It's all "I can't afford this", "I can't compromise on that", "How would a HPC affect me?" That's the wrong to look at it.

When I was buying my first and second properties, the logic was this: if there is a fall in values, I want to be in an average situation, because I can be reasonably sure that if the crash is so bad that people in an average situation are significantly affected, the Government may well step in.

caronoel

ruggedtoast wrote: »

I couldnt afford to live in my street now. Prices gone silly, boomers are jumping up and down.

And yet you've just told us all that you've recently bought:
http://forums.moneysavingexpert.com/showpost.php?p=68617187&postcount=21

ruggedtoast wrote: »

I bought a few years ago, have a mortgage and would like to upsize ...

Were you lying then or are you lying now?

wotsthat

cells wrote: »

theoretically it is a gamble with a minor downside and a major upside

Short of a >25% HPC you would never need to go ahead with the downside.

How frequent are 25% HPCs? 1 in 20 years?


anyway its what I would probably do if I had only a 5% deposit. I would not let HPC fears put me off as not buying is also a risk. For everyone else do as you please.

You're not putting yourself in the right mindset because you don't expect a HPC.

If you truly believe a HPC is just around the corner then the most sensible thing is to sit and wait. If that person can't see the downside then they can't see any risk to be mitigated.

If someone is only fearful of a crash rather than expecting one why not buy a house a little cheaper, get a fixed rate and just ride out any crash. No one goes bankrupt just because their house is suddenly worth less. If they still can't sleep because of a potential unrealised loss they aren't cut out for ownership and should rent and pay a landlord to deal with the risk.

ruggedtoast

Cornucopia wrote: »

Isn't that quite good at their age?

It's the thrusting that is the main problem.

Thrugelmir

cells wrote: »

t
How frequent are 25% HPCs? 1 in 20 years?

You don't need a HPC to be financially ruined. Any combination of other factors can be equally as devastating.

padington

Landofwood wrote: »

Please stop trying to explain, you are only hurting yourself.

Bankruptcy is devastating to the family involved.

How can you defend trying to pay back debts that may be massively and permanently economically disabling against going bankrupt at the expedient moment ?

Sometimes it's the best thing you can do for your family.

... and sometime it's wiser to take a considered gamble early on than spend a life paying someone else's mortgage rather than an ill-considered gamble to make your mortgage a little lower at the risk of the former happening.

padington

wotsthat wrote: »

You're not putting yourself in the right mindset because you don't expect a HPC.

If you truly believe a HPC is just around the corner then the most sensible thing is to sit and wait. If that person can't see the downside then they can't see any risk to be mitigated.

If someone is only fearful of a crash rather than expecting one why not buy a house a little cheaper, get a fixed rate and just ride out any crash. No one goes bankrupt just because their house is suddenly worth less. If they still can't sleep because of a potential unrealised loss they aren't cut out for ownership and should rent and pay a landlord to deal with the risk.

What the bankrupt fearing crashist fails to realise is that if you price yourself out of the market from trying to play rent roulette, you may lock your family into debt servitude for generations and there is no sick note home for that fix.

Only thing left is a train ticket to Shitville.

What's cells is essentially saying is it's all a gamble but there is one gamble that's a pretty good bet and what people need to remember is they all have a huge amount to lose (in future rent payments) so the wisest thing to do sometimes is to hedge your bets and have an 'out' if the market goes up or down but allow yourself the chance not to be locked out as that's the greatest risk.

I wouldn't recommend trying to hide your money but if you only have 5k in the world, it's great advice.