How interest rates affect property values

Conrad

economic wrote: »

I am more inclined to just not buy yet though. prices have gone up and I rather just wait. I don't need the space as well and happy where I am for the foreseeable future.

instead ill use the rest of my cash to invest in stocks/dollar.

once you have your own home you suddenly become a lot more selective where to invest.

Before I got into B2L I used to just pile as much as I could into ISA's.


If I had my time again I reckon I'd perhaps just have done that, as it's way less worrying.


On the other hand property can be thrilling and interesting at times.


Stocks based investments worry me - vast salaries to Directors, huge company expenses in this age of employment rights / paternity rights and the sueing culture. I still put a bit into ISA's but I don't really view them as safe - just bits of paper really. The US debt pile is staggering, Dollars don't fill me with peace.

economic

Conrad wrote: »

Before I got into B2L I used to just pile as much as I could into ISA's.


If I had my time again I reckon I'd perhaps just have done that, as it's way less worrying.


On the other hand property can be thrilling and interesting at times.


Stocks based investments worry me - vast salaries to Directors, huge company expenses in this age of employment rights / paternity rights and the sueing culture. I still put a bit into ISA's but I don't really view them as safe - just bits of paper really

if you buy index trackers or funds then there's little to worry about except for the volatility - but if you don't need the capital then that's fine. compounding should work in your favour long term.

Crashy_Time

cells wrote: »

no my dear boy this is a rich country with a lot of wealth and a value added of nearly £2 trillion pounds a year and a stock of wealth in the region of £15 trillion pounds of which ~2/3rd is not residential property.

With the exception of London (and then mostly inner London rather than outer London) most the regions are down right cheap. The North and Midlands and Wales and Scotland home to about half the country are mostly cheap so cheap that the inerest on the mortgage (even at 5%) is less than local social rents.

Of course we all know that for you property needs to be 100% off to be worth the risk

http://www.bbc.co.uk/news/business-36266941

Crashy_Time

economic wrote: »

silly waste of time coment

Oh, I forgot, you bought back into the biggest property bubble in history just as it starts to pop. There is probably far too much reality in my comment for you, sorry. :rotfl:

economic

Crashy_Time wrote: »

Oh, I forgot, you bought back into the biggest property bubble in history just as it starts to pop. There is probably far too much reality in my comment for you, sorry. :rotfl:

I calculate that it would take around a 30% crash for me to break even (me to be wrong). Whilst you have to have prices fall more then 100% to make it worth it not buying (you to be right). Who's smarter?

Filo25

Crashy_Time wrote: »

In a proper correction having a loft extension won`t save you...
:rotfl: The property will still just be massively overpriced. Any "inheritance" based on property will be crashing too so it will self perpetuate the downward spiral. It was a credit based Ponzi scheme, nothing more nothing less, people watched the telly and believed all the junk about adding bits on to their houses.

Exactly how overpriced do you think property is, and what do you think is going to drive this collapse in values which we are going to see soon.

And I say that as someone who could certainly see a correction in the market, I just don't see any likely drivers for a full on crash

westernpromise

economic wrote: »

if prices fall 30% then clearly sentiment would have changed and perhaps people may not be so confident to trade up. and only the brave would. who knows.

Be greedy when others are fearful, etc.

westernpromise

Conrad wrote: »

My honest advice to anyone bearish is to just think in a sort of 30 year time span.

This, although there's an argument that even this is maybe too short term.

westernpromise

cells wrote: »

Of course we all know that for you property needs to be 100% off to be worth the risk

Closer to 130%, I believe.

Thrugelmir

Filo25 wrote: »

Exactly how overpriced do you think property is, and what do you think is going to drive this collapse in values which we are going to see soon.

What's the income to price ratio ratio for an average home in London?

In essence at what point is the market no longer sustainable. As more people look to exit than are buying. Everything runs through a natural cycle eventually. That's life.