Housing market move given Brexit and interest rise

GreatApe

NineDeuce wrote: »

Decreasing house prices is not a good thing as negative equity can have serious implications on families. What is needed is a stagnation in increase and allow wages to catch up.

House prices have done just that in Scotland / Wales / Norther-Ireland / NE-England / NW-England / Yorkshire&Humber and a lot of the E&W Midlands too. Those areas are now very affordable so much so that a repayment mortgage on a 3 bedroom starter terrace is close to or lower than social rents

LdnFtB

NineDeuce wrote: »

Decreasing house prices is not a good thing as negative equity can have serious implications on families. What is needed is a stagnation in increase and allow wages to catch up.

Most households with repayment mortgages can stomach decreasing prices though. As long as the decrease is less than the capital repayment portion of the mortgage then their equity in a property will actually increase. 1-2% nominal falls shouldn't put anyone into negative equity.

Crashy_Time

GreatApe wrote: »

House prices have done just that in Scotland / Wales / Norther-Ireland / NE-England / NW-England / Yorkshire&Humber and a lot of the E&W Midlands too. Those areas are now very affordable so much so that a repayment mortgage on a 3 bedroom starter terrace is close to or lower than social rents

http://www.mortgagesolutions.co.uk/news/2017/10/12/housing-bubble-alert-issued-mortgage-adviser-19-uk-towns-cities/

chappers

chucknorris wrote: »

You are correct about that 1% GreatApe, we are looking to upsize our home and we currently have about £1.3m sitting in savings accounts earning about 1% (1.17% in my case in a Sainsburys bank savings account), I feel like I'm being mugged.

you are. inflation is currently sitting just below 3% so your savings are actually being eroded.

caronoel

Crashy_Time wrote: »

http://www.mortgagesolutions.co.uk/news/2017/10/12/housing-bubble-alert-issued-mortgage-adviser-19-uk-towns-cities/

Yet more wisdom from HPC's answer to Warren Buffet

This eminent wisdom comes from a 50-something man who lives alone in a bedsit in Edinburgh, having sold up in the late 90s – just before a 20 year property bull run.

He missed the buying opportunity of a lifetime in 2008-09 and seems to be just a little bitter.

chappers

equity is just vanity, unless you are trying to release it.
when times are hard all people care about is can they keep hold of their houses, any price correction is irrelevant, yes it stagnates the market and might put people into negative equity, but what really matters is can people afford their mortgage, and at the last correction yes employment levels were high and interest rates low so people managed.
The 80/90s crash was different there was a hike in interest rates to try to hold the value of the pound against the deutsch mark to keep us competitive in Europe ahead of entry into the ERM and this in addition to high unemployment meant that the bubble burst.
But the overall trend has been upwards.
I know of people who just surrendered their keys in those days, who now own several houses outright or with minimal mortgages.
The market will recover and provided you are sensible with your gearing, you should be OK

Crashy_Time

chappers wrote: »

equity is just vanity, unless you are trying to release it.
when times are hard all people care about is can they keep hold of their houses, any price correction is irrelevant, yes it stagnates the market and might put people into negative equity, but what really matters is can people afford their mortgage, and at the last correction yes employment levels were high and interest rates low so people managed.
The 80/90s crash was different there was a hike in interest rates to try to hold the value of the pound against the deutsch mark to keep us competitive in Europe ahead of entry into the ERM and this in addition to high unemployment meant that the bubble burst.
But the overall trend has been upwards.
I know of people who just surrendered their keys in those days, who now own several houses outright or with minimal mortgages.
The market will recover and provided you are sensible with your gearing, you should be OK

Nah, the debt burden on average people is miles different to what it was back then, small interest rate changes will affect things big time. The Tories are doing their best to hand the next election to JC, and he will quickly get us into troubled waters with international markets IMO.

brit1234

ukcarper wrote: »

I agree prices are to high in some areas, but I don't agree that it is entirely down to government intervention to prop up housing market otherwise property would have boomed everywhere. Most of the measure taken were to protect economy not prop up housing market. What is need is more property in areas where it is needed the most or somehow to spread demand more evenly around the country.

It's not totally down to govenment intervention but makes a large part of it. You have the whole foriegn investors issue which was focussed on certain areas of the country and not others, however in the areas where they invested heavily it caused ripples outwards,

Govenment policy destroyed savings too which lead to lots of money being taken out and put into property instead. There are massive consequences when you attack free markets and result in asset bubbles such as housing.

ukcarper

Crashy_Time wrote: »

Nah, the debt burden on average people is miles different to what it was back then, small interest rate changes will affect things big time. The Tories are doing their best to hand the next election to JC, and he will quickly get us into troubled waters with international markets IMO.

What makes you say that since 2007 affordability criteria has been tightened so people are less likely to default.

Crashy_Time

ukcarper wrote: »

What makes you say that since 2007 affordability criteria has been tightened so people are less likely to default.

Everything is fine then???!