House Price Crash Discussion Thread

merlinthehappypig

I know all that - we are renting now & yes you are reading it right.

Half the money is with NR's fixed rate bond at 6.9% - the other half is shortly on it's way to NR's Silver Saver account from Sainsburys so the savings side is fine.

The financial arguments are a done deal and I have lost them, until now at least.

With the interest we get and a 15% or so reduction in prices we could buy this house mortgage free in two years. That's probably looking on the pessimistic side. The economic problems seem to be unstoppable. I'm changing my mind daily about the extent of this crash.

Finally I seem to be winning the argument, though it's not about winning and losing. We are going to pull out and look at our options.

At least we can pull out. What about all the poor devils on 90%+ mortgages on SVR who are getting letters like this?

merlinthehappypig

Right, we've pulled out.

I feel a mixture of an overwhelming sense of relief and a certain amount of shame. I was absolutely shaking when I had to give the agent the news, but there was no alternative.

Nenen

merlinthehappypig wrote: »

Right, we've pulled out.

I feel a mixture of an overwhelming sense of relief and a certain amount of shame. I was absolutely shaking when I had to give the agent the news, but there was no alternative.

:grouphug:
I'm as sure as anyone can be that you've done the right thing Merlin... you and your family have been through the mill lately and deserve a break from all the worry.

WTF?_2

merlinthehappypig wrote: »

Right, we've pulled out.

I feel a mixture of an overwhelming sense of relief and a certain amount of shame. I was absolutely shaking when I had to give the agent the news, but there was no alternative.

I wouldn't worry about it ... buyers pulling out because of mortgage problems (lenders withdrawing/changing offers) is increasingly par for the course in today's housing market. It's just a fact of life, like bidders being played off against each other during the boom years.

Walter_J

!!!!!!? wrote: »

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

It all depends on whether the value of the house is rising or falling. In a rising market it makes sense to buy on the biggest mortgage you can. A 100% mortgage and 0% equity can quickly become a 50% mortgage and 50% equity if the value of the house doubles.

In a falling market however, paying mortgage interest is far worse than renting!

pickledpink

Yes but in the long term property ALWAYS rises! At least you have something to show for your interest payments in, say, 10 years time when your property has doubled in value.

You have NO chance of recouping your money from paying dead rent, but by buying into bricks and mortar you can be certain that you will have have something to show for all the money you've spent.

History shows that after every recession and property slowdown the market picks up again - often at a very rapid rate! In 10 years from now all property will be at least double (if ot more) than what it's worth now. That's why so many people are anxious to jump on the property ladder and not get left behind.

Paul_N_4

pickledpink wrote: »

In 10 years from now all property will be at least double (if ot more) than what it's worth now.

I think you're going to wish you didn't write that

As just one example, last time property took a tumble around 1989, property prices took 10 years just to reach the value they were in 1989, factor in inflation, and it was actually well into the 2000's before average property in the UK regained it's value. So that's far from "double" over a 10 year period.

The only way house prices can double from now is if there is a significant jump in wage inflation, i.e. like 100% pay rise over 10 years, for the majority of the population. Do you think this is going to happen?

abaxas

pickledpink wrote: »

Yes but in the long term property ALWAYS rises! At least you have something to show for your interest payments in, say, 10 years time when your property has doubled in value.

You have NO chance of recouping your money from paying dead rent, but by buying into bricks and mortar you can be certain that you will have have something to show for all the money you've spent.

History shows that after every recession and property slowdown the market picks up again - often at a very rapid rate! In 10 years from now all property will be at least double (if ot more) than what it's worth now. That's why so many people are anxious to jump on the property ladder and not get left behind.

Renting is a service.

If the differential between the (rent + investment from saved costs) and (mortgage payments + upkeep costs) > rise in house value, you show a larger profit from renting. Simple mathematical fact.

Currently this is case so renting provides more 'something to show for all the money you've spent' than buying. However I'm sure there will be times where buying is the better deal, that is when you buy.

Also renting allows for freedom of movement, more stability and tax advantages to those in unstable or contract based employment.

I'm not going to say people shouldnt buy, but they shouldnt be brainwashed into thinking it's the only way. Lots of us have profited and been able to live in houses/flats above our buying power by renting.

Obviously investing in quality of life and making money should be outlawed. I am an evil person for thinking this.

m00m00

pickledpink wrote: »

Yes but in the long term property ALWAYS rises! At least you have something to show for your interest payments in, say, 10 years time when your property has doubled in value.

You have NO chance of recouping your money from paying dead rent, but by buying into bricks and mortar you can be certain that you will have have something to show for all the money you've spent.

History shows that after every recession and property slowdown the market picks up again - often at a very rapid rate! In 10 years from now all property will be at least double (if ot more) than what it's worth now. That's why so many people are anxious to jump on the property ladder and not get left behind.

wrong, deduction 101

property may always rise in the long run, but you have no idea how long a run this may be for a start. It may take 30 years for property to return to the current ridiculous high ratio of wages to values, you have now way of KNOWING this. All you are doing is using your subjective views as a universal viewpoint.

there are very few people on this forum who say buying a property is the wrong thing. There are however quite a few people how feel buying a property at the wrong time, is a mistake.

WTF?_2

pickledpink wrote: »

History shows that after every recession and property slowdown the market picks up again - often at a very rapid rate! In 10 years from now all property will be at least double (if ot more) than what it's worth now. That's why so many people are anxious to jump on the property ladder and not get left behind.

Anecdotal evidence would suggest that if you bought around the peak of the late 80s boom it was around 10 years before the house was valued at what you paid for it.....

Rent money is no more money thrown away than money for food or petrol is. You need somewhere to live so you pay for it. If it made more economic sense to buy then I would - but it's been 3 or 4 years since that was the case and buying a house entails quite a bit of responsibilities.