House Price Crash Discussion Thread

WTF?_2

pickledpink wrote: »

!!!!!!

Why do you want to buy if you think property is such a bad investment? After all, once this recession is over, and property prices start rising again (as they always do after a crunch/recession/property slump) what makes you so sure property will rise once you've bought?:p

Maybe another recession will come along and you'll lose the lot! If I were you, I'd stay renting. Far more lucrative according to you!:rotfl:

You need to pay more attention to what I'm saying ...Property is a bad investment right now (it has been for the last 18-24 months).

That doesn't mean it will ever be thus.

In a few years there will be some very good opportunities to pick up a home without mortgaging yourself to the eyeballs and Buy To Let will once again make sense for the investment minded.

But you'd have to be nuts to consider 'investing' in property now and even if you are shopping for a long term home you'd be well advised to hold off if at all possible.


Just because I'm railing against the 'house prices only ever go up' crowd doesn't mean that I hold the diametrically opposite view :rolleyes:

dweeby

!!!!!!? wrote: »

I anticipate buying 2-3 years down the line as prices bottom out. However, if buying becomes more financially attractive than renting I will start looking to purchase property from that point.

So, you're gambling that what you spend on 2-3 years rent (a certainty) will be less than the losses due to house price reductions (an uncertainty)?

What ever the answer to the above question, it's a loss either way.

Money aside, I've done both and I prefer living in "my own"(?) home. And, there are some (relative) bargains out there right now.

thegibdog

dweeby wrote: »

So, you're gambling that what you spend on 2-3 years rent (a certainty) will be less than the losses due to house price reductions (an uncertainty)?

What ever the answer to the above question, it's a loss either way.

I started writing a response to this but it took too much effort to go through all the things that are wrong with those comments.

dweeby

thegibdog wrote: »

I started writing a response to this but it took too much effort to go through all the things that are wrong with those comments.

Thanks, you're right, there is a gain. The guy who owns the property !!!!!! is renting is doing ok.

abaxas

dweeby wrote: »

So, you're gambling that what you spend on 2-3 years rent (a certainty) will be less than the losses due to house price reductions (an uncertainty)?

What ever the answer to the above question, it's a loss either way.

Money aside, I've done both and I prefer living in "my own"(?) home. And, there are some (relative) bargains out there right now.

'"my own"(?) home'......

A property I am currently in possesion of - is a much better term.

No-one ever owns their home, they mearly own the right to live there. This is dependent on the queen (!) and your lender.

However I'm glad to find others who dont beleive they own their 'homes'. About time a few more were told eh !

WTF?_2

dweeby wrote: »

So, you're gambling that what you spend on 2-3 years rent (a certainty) will be less than the losses due to house price reductions (an uncertainty)?

What ever the answer to the above question, it's a loss either way.

Money aside, I've done both and I prefer living in "my own"(?) home. And, there are some (relative) bargains out there right now.

Firstly, rent is no more money thrown away than interest payments are.

Houses are now so expensive around my place that the interest part of the payment on any house I'd want to buy would be more than what I currently pay in [rent minus the amount the interest on my savings are earning]. The sums just don't add up. Maybe it's different where you live. Once buying a house works out the same or cheaper than paying rent for me, I'll start trawling the estate agents. That ought to be at least two years I reckon.


Secondly, housing has been in a huge bubble. We have hit the peak IMO and we are about to see serious deflation of these assets. I certainly don't want to sink my resources into something that's likely to lose value as well as worry about what happens should I lose my job and can no longer pay the additional loan I took on top of committing my savings when I bought the house. Not when I can very comfortably afford to rent a decent place near to where I work (rent is less than 25% of my after-tax income). Why on earth would I want to turn my savings into a negative equity cushion for a mortgage company?


Make no mistake, this is an awful time to buy a house and no amount of sentimental guff about a 'home for life' makes it any other way.

WTF?_2

dweeby wrote: »

Thanks, you're right, there is a gain. The guy who owns the property !!!!!! is renting is doing ok.

Indeed he is - because he bought it 9 years ago close to the bottom of the cycle.

It's all about timing.

Buying at bottom of cycle - good. :j
Buying at or near top of cycle (ie NOW) -bad. :mad:

Perhaps if you looked at things objectively instead of seeing this in an antagonistic way as an advocacy debate for/against property ownership it might help :cool:


As it is, I'm happy that I'm paying about half of what it would cost me in mortgage payments to buy the place, he's happy getting his mortgage paid for by me and I have a stack of ever-growing savings to use when it makes sense to buy or to cushion the fallout of a recession.

merlinthehappypig

As a further indication of the way things are heading........

Regardless of all the other problems surrounding our mortgage offer we have had another letter changing the T&C's of the offer again.

When we applied 5 weeks ago it had an application fee of 0.5% and was a two year tracker at 0.84% above BBR (not the most competitive I know, but the best we could do).

When we received the offer it had changed to a 1.5% fee with a two year track at 0.64% above BBR which was considerably worse for us as we only need the mortgage for a couple of years or so.

The letter today has altered the conditions again. It's still a 1.5% fee, but the tracker rate has risen to 1.29% above BBR!

Another nail in the coffin of this house, I think, but an indication of what is happening out there. Bear in mind that we are only looking at around 30% LTV.

Presumably the lender can alter the conditions at any time until the mortgage is finalised ie. the money taken?

We could find ourselves with a huge fee and 3% above BBR..............

We are ready to exchange other than this and the lender have said that we can't expect a decision on any revised offer for at least two weeks because they are way behind and Easter is coming. We simply can't keep the seller's waiting that long irrespective of how horrible they have been.

They are part of HBOS as well...........

Decision time I think and I know what my decision is.

codger

dweeby wrote: »

So, you're gambling that what you spend on 2-3 years rent (a certainty) will be less than the losses due to house price reductions (an uncertainty)?

What ever the answer to the above question, it's a loss either way.

Money aside, I've done both and I prefer living in "my own"(?) home. And, there are some (relative) bargains out there right now.

Costs incurred by home owners with a mortgage during a property slump aren't merely represented by losses in property value: the actual loss comprises the total number of mortgage payments made during the time-period of value loss.

So add together 36 monthly mortgage payments, and the difference between asset value at the start of the period and the end, and the sum is considerably larger than anything that might've been spent on rent during that same period. Renting, you pay, you walk away. Owning, you pay, you see what you're paying for losing its value, you don't walk away without expensive outgoings to solicitors and estate agents.

Thankfully, we're at a stage in our lives where we don't have a mortgage to pay and we bought something in 2006 at a price we negotiated in expectation of the inevitable decline of an unsustainably over-hyped market whose existence owed nothing to real economics but Government perfidy and bank / building society greed.

But that was just our luck and, sadly, isn't everyone else's -- hence I entirely agree with !!!!!!: renting makes sense now, buying doesn't.

(Which gives me no cause for satisfaction at all, because we'd now like to sell, and move somewhere else. . .)

WTF?_2

merlinthehappypig wrote: »

As a further indication of the way things are heading........

Regardless of all the other problems surrounding our mortgage offer we have had another letter changing the T&C's of the offer again.

When we applied 5 weeks ago it had an application fee of 0.5% and was a two year tracker at 0.84% above BBR (not the most competitive I know, but the best we could do).

When we received the offer it had changed to a 1.5% fee with a two year track at 0.64% above BBR which was considerably worse for us as we only need the mortgage for a couple of years or so.

The letter today has altered the conditions again. It's still a 1.5% fee, but the tracker rate has risen to 1.29% above BBR!

Another nail in the coffin of this house, I think, but an indication of what is happening out there. Bear in mind that we are only looking at around 30% LTV.

Presumably the lender can alter the conditions at any time until the mortgage is finalised ie. the money taken?

We could find ourselves with a huge fee and 3% above BBR..............

We are ready to exchange other than this and the lender have said that we can't expect a decision on any revised offer for at least two weeks because they are way behind and Easter is coming. We simply can't keep the seller's waiting that long irrespective of how horrible they have been.

They are part of HBOS as well...........

Decision time I think and I know what my decision is.

Good grief - am I reading this right, you are putting up 70% of the purchase price of the house and only requiring a 30% loan and you are still getting this hassle from lenders?

I'd be extremely tempted to save like crazy plus see about some high-interest savings accounts for your existing deposit. Find an acceptable place to rent and then take another look at the market in a year or two. If you play your cards right you could be looking at living mortgage free or close to it.