House prices

MobileSaver

Gorgeous_George wrote: »

When I moved home last year I paid £10k in Stamp Duty. Along with Estate Agent and solicitor fees.

All of which, for the vast majority of home-owners, will be recouped and then some when they come to sell several years down the road.

Conversely renter's administration fees, reference check fees, credit check fees, tenancy renewal fees and checkout fees could all have to be paid every six months in a worst case scenario and all of which are spent and gone forever.

Gorgeous_George wrote: »

I cannot phone my landlord to get things fixed in my home. I have to pay.

Similarly tenants cannot just do what they want when they want in their landlord's property. They have to phone and ask permission and usually there's very little they can do if their landlord says no.

Gorgeous_George wrote: »

If I wish to move, I need to find a buyer and a new home and then try to get the buying and selling to complete on the same day.

Apart from finding a buyer, I can't see there's much difference with a renter finding a new rental unless they're happy paying for two rentals at once if dates don't match up exactly.

Ultimately, once someone is ready to settle down in a particular area, for most people it's a no-brainer to buy if they can afford to do so and something they'll probably regret for many years to come if they don't.

Gorgeous_George wrote: »

I haven't got much wrong over the years regarding houses and interest rates.

That's quite hard to believe given some of the tosh you've posted in this thread.

Filo25

Crashy_Time wrote: »

Lets see how calm the indebted masses are when rates start rising

Here's the problem though Crashy, if interest rises lead to a house price crash, the debt bubble bursting and by extension a collapse in the real economy as well, why on earth would the BoE persist with interest rises, they would in fact quickly reverse them.

I know most on HPC seem to think the government and BoE's main policy objective should be to collapse house prices to a level they deem "fair", but unfortunately for the fine denizens of that site, they have rather different objectives.

I say all this as someone who thinks we probably will see a correction in the housing market in London and the surrounding area, I just don't think it will be remotely enough to satisfy the crash zealots.

Herzlos

Crashy_Time wrote: »

Lets see how calm the indebted masses are when rates start rising

They'll just put your rent up to compensate.

Seriously, though, very few people are on the boundary where a modest rate change would harm them. 1 or 2ppt will hurt for most folk, but it won't lead to wholesale defaults.

Koldweather1

0.25 here and there isn't going to hurt too many people, they will only raise up the rates beyond 0.5 IMO if wage growth can justify it.

0.5 rates didn't stop houses from shooting up from 2012 onwards did it? Sure 7-10% would be killer but get real, the BoE isn't going there for many years unless they absolutley have to, and ifit gets THAT bad, you can bet your bottom dollar there will be countless schemes from the govt to help home owners, just like between 08-12.

I think far more likely is we get a slow price deflation RELATIVE to wages and inflation, too many people have skin in the game to allow a pin !!!!! burst like the HPC peeps think.

Of course they need a fast crash, they have now wasted SO much time/money on rent, entire generations have passed through since some of the first HPC people came along!

Herzlos - spot on, a small rise will just mean rather than a 14 day holiday, people go down to 10. Instead of Tesco luxury, they buy the middle range. Most people have plenty of scope to slightly downgrade their lives if needs be.

Gorgeous_George

MobileSaver wrote: »

That's quite hard to believe given some of the tosh you've posted in this thread.

Time for me to log out.

Good luck all MSEers. I'll pop back in a year or two.

GG

westernpromise

Koldweather1 wrote: »

Most people have plenty of scope to slightly downgrade their lives if needs be.

Although not Crashy, amusingly. He lives in a bedsitter in Scotland, so if times get hard, he can't exactly move to a smaller place in a cheaper area - he's right out at the end of that line already! Neither can he really raid his savings because he still has a lifetime of rent to find from somewhere - so if he spends his stash, at some point in the future he's out on his @r5e.

It's actually pretty ghastly when you look at the actual maths of Crashy's situation. According to Zoopla, prices in Edinburgh have gone up 265% over the last 20 years, which is when he sold. A one-bedder worth about £120k now would thus have cost about £33k in 1996. Mortgage rates were then about 7%, so his monthly payment would initially have been £233. By 2003 this would have dropped to 5% and £193. By 2009 it would have dropped to probably 1% and £124.

To put this another way, if he had maintained after 2003 the original pay rate of £233 a month, he would have owed only £18,000 of the mortgage by early 2009. If he'd stayed at £233 when rates fell to 1%, then by early 2013, he'd have paid the whole mortgage off, eight years early, nearly five years ago.

When we take the p155 out of Crashy, as we all like to do, we should perhaps think about that. This is a man who has paid £100,000 over the last 21 years to live in a rented bedsit and who faces an eternity of continuing to pay £400 a month to rent it. Had he bought it 21 years ago, he'd have saved £60,000 versus renting, and he'd now own something worth £120k.

In fact, having finished paying for his flat 4 years ago, Crashy could have bought another Edinburgh bedsit, putting down the £60,000 that he had saved as deposit, and borrowing £30,000 more on a BTL mortgage to raise its ~£90k price of 4 years ago. He could then have let the place out at a yield of about 3% which would give him a net income of £2,000 a year.

Thrugelmir

GreatApe wrote: »

Not many people are impacted by negative equity because only 3-4% of people buy in any given year the other 96-97% are insulated as they bought at prices below the peak year. Why do I have to keep repeating myself this is not difficult to understand.

Negative equity isn't so much the issue. But mortgage arrears upon a change in financial circumstances. Loss of income soon results in equity evaporating.

Thrugelmir

chucknorris wrote: »

It is in the block where I have 2 flats, and recently sold one. This looks quite cheap to me, so I think prices have dipped a bit more than I thought.

I'm currently dealing with my late mothers estate. In the throes of listing her property in Reigate. Definately a softening in the past few weeks after discussions with surveyors and agents. Though with all matters property, location, location, location is what counts.

chucknorris

Thrugelmir wrote: »

I'm currently dealing with my late mothers estate. In the throes of listing her property in Reigate. Definately a softening in the past few weeks after discussions with surveyors and agents. Though with all matters property, location, location, location is what counts.

I know, we live in Dorking, which is just 4-5 miles away, we are waiting to buy in Ashtead, so the way the market is going really suits us, we do have something to sell, but we are upsizing.

Sorry to hear about your mother.

Thrugelmir

chucknorris wrote: »

Sorry to hear about your mother.

Time catches up with us all.

Thanks.