House Price Crash Discussion Thread

boinging_2

borntobefree wrote: »

Hi

I am 45. I bought my first flat in 1887 in London. Since then I have paid out the following:-

£140k interest, £92K capital and £15k endowment, $15k moving costs. Total £262k.

Last summer someone would have paid £650k for my house.

My point is if I hadn't have bought I would have to rent. The current rental value of my house is £2.5k per month. My house would have to fall a long long way before I would have been better off renting...:D:cool:

B2bF

You are absolutely right. What the argument on here is, that you should have taken that £650K, realised your profit and rent while prices are falling (thus saving even more money) and then start the cycle again on the next upward trend.

I bet you wouldn't find someone today to pay £650K for your house, so in effect against your own figures you are now losing money.

snoopy78

borntobefree wrote: »

Hi

I am 45. I bought my first flat in 1887 in London. Since then I have paid out the following:-

£140k interest, £92K capital and £15k endowment, $15k moving costs. Total £262k.

Last summer someone would have paid £650k for my house.

My point is if I hadn't have bought I would have to rent. The current rental value of my house is £2.5k per month. My house would have to fall a long long way before I would have been better off renting...:D:cool:

B2bF

This is really poor financial justification, over 21 years you have manage to increase the value of the asset, we are also talking about an assets that is probably at the peak of its value and may slide down. 12 months ago a banks would have said the subprime mortgages have pushed the value of there bank up by huge amounts, now the same mortgages are not worth the paper they are printed on.

Also you need to take into account value of money, when you invested is not the same as now, and rental values 21 years ago are no where near what they are now, the question is has the house increased in value in real terms . People also forget that owning a house incurs a lot more costs that renting one.

Plus I am willing to bet that you did not borrow 4 times your salary when you first purchased the house.

Although I am not saying you have not earned money from your house it is very misleading just to look at those figures alone.

snoopy78

Dble post sorry

harryhound

Just click edit and then delete (twice) on the pop up screen.

borntobefree did Lizzie II remember to send you the telegram? 19:07 Magic potion, you are looking 100 years younger:-)

jellybean19 it already is. Watch this space and we will try to call the bottom.

BACKFRMTHEEDGE

snoopy78 wrote: »

Although I am not saying you have not earned money from your house it is very misleading just to look at those figures alone.

Don't think the poster was trying to say anything about making money. I think they were giving you the figures which show that they had spent less buying a house than they would have done renting and therefore they were better off AND had a house at the end of it. This is despite the fact that in 21 years markets move up and down. The Skys falling in, so what......it will have to fall along way before it makes people want to rent more than buy, so demand will ultimately push prices up (again)....

boinging_2

borntobefree wrote: »

I don't mind losing money as it's not real anyway;)....it's my home....I was just trying to make the point that whatever the ups and downs of the market, buying is cheaper than renting. If I was buying a house tomorrow I wouldn't care what was going on in the market (I sold my first flat for less than I paid for it). I would only care about the interest rate and my job prospects and whether I could meet my mortgage payments....the market goes up the market goes down but in the long run it's cheaper to buy.

While I may agree with your sentiments, I don't agree with your money saving sense on a money saving website.

So I will add the money saving tip - If you hold off buying today you will definately save money tomorrow.

This won't always be the case, but today it is. I will definately be buying a house again, but today is not the right time, 6 months may be, 12 months may be today no, no, no and no.

boinging_2

borntobefree wrote: »

Ps If I had a mortgage deal I would defo buy a house tomorrow! Can't think of a better time since no-one else has a mortgage..

AHHHHHHHHHHHH!

You are not a moneysavingexpert, you are a moneylosingidiot.

HOUSE PRICES ARE FALLING.

If you wait you will not have to pay as much therefore SAVE money. Sheeshh.... Is this really that difficult to grasp?

setmefree2

You can only buy a house if you have a job. The credit crunch will probably mean alot of people lose their jobs, maybe you are laughing too soon.....I hope you never rue the day when you thought the credit crunch was a good thing. I personally think we will all suffer home owners or not...

WTF?_2

setmefree2 wrote: »

You can only buy a house if you have a job. The credit crunch will probably mean alot of people lose their jobs, maybe you are laughing too soon.....I hope you never rue the day when you thought the credit crunch was a good thing. I personally think we will all suffer...

Who on earth said that the credit crunch is a good thing?

It's certainly a good thing if house prices become more affordable that doesn't make the cause a good thing.

Too bad it took a near-meltdown of the global financial system - caused ironically by reckless mortgage lending - to make the house price correction happen. But if it hadn't been the credit crunch then rising interest rates (which have been cut because of the crunch instead of raised as they really should be) would have killed the market off instead. Or a recession. You get the idea.

The price curve will always return to the long-term trend unless underlying conditions change permanently. If you try to buck the trend you will get burned and if you make a large bet on conditions remaining anomalous (as they were in the credit bubble) then you will suffer financially when the bet turns bad, as it eventually will.

Incidentally, you might want to reflect that this 'return to the trend' rule also applies to things like interest rates which as I said earlier are too low. Expect to see them make a return to the 8% or so average in the medium term future (even though they'll likely fall more in the short term).

boinging_2

setmefree2 wrote: »

You can only buy a house if you have a job. The credit crunch will probably mean alot of people lose their jobs, maybe you are laughing too soon.....I hope you never rue the day when you thought the credit crunch was a good thing. I personally think we will all suffer home owners or not...

Okay so I lose my job, is it better to be paying a smaller monthly amount in a rented property (with the option to move into a cheaper rented property) with money in the bank or lose my house as I can't keep up the mortgage payments?

Thus, again you have proved why it is not a good idea to buy a house today.