House Price Crash Discussion Thread

setmefree2

boinging wrote: »

Also if interest rates go up, would it not affect people who already have a mortgage? So in essence your point applies to everyone. Therefore if I can save some money up front when buying then I'm better off.

I'm not trying to say anything much really, just that interest rates have an impact as well as market values. I like figures and I hope someone will confirm/ challenge my numbers. We all make our own choices in the end:o

However, I suppose I did think the debate on this board was abit one sided in favour of house prices and that could cost people money...it is money saving expert after all.

PS my figures could be wrong!

pickledtink

Quote:
Originally Posted by pickledtink
My deposit is very large.

Then the impact of interest rate hikes will be less

Quote:
Originally Posted by pickledtink
My mortgage term will be about 10 years only etc

Then the impact of interest rate hikes will be less

Exactly. Which is why I say constantly each case is different. What's right for me may not be for others. Do your own sums basically.
However for some of us sitting it out right now most certainly IS the right action.
My personal opinion is that interest rates will dip then hike to as much as 10% for many of us then after a couple of years drop back to something more manageable.
However that's just what I think.
I'm basing my own affordability on 10% now.

PasturesNew

pickledpink wrote: »

Me again.

How long do you anticipate waiting before you buy? I know some of you seem to think prices will keep on falling for years to come - do you not worry that some of you will be too OLD to get a mortgage in,say, 5/10 years time? Some of you seem to be old NOW! I

5 years.
Why assume everybody will need a mortgage?
I will be paying cash.

pickledtink

setmefree2 wrote: »

I've seen the light. This is what I think the maths is. I will get back to you if the maths is wrong, as I'm sure someone will let me know:D

Happy to be proven wrong but if £100,000k costs the following over 25 years:-

7%, £212,034(£18,744 more than at 6%)
6%, £193,290 (£17,913 more than at 5%)
5%, £175,377

then

£100, 000 @ 5% costs £175, 377 (£1.75377 * £100,000)
£90,732 @ 6% costs £175,377 (£1.9329 * £90,732)
£82,713 @ 7% costs £175,377 (£1.75377 * £82,713)

Therefore,
Prices have to drop 9%, then 8% to be equal to the cost of £100k at 5%.
Thus, when interest rates move 1% the market has to drop 9% for things to be the same and 17% for a 2% rise.



So if interest rates go up 1% then the market has to drop 8% (roughly) for the cost of a £100k house to be the same (over the life of a mortgage)

And if rates go up 2% then the market has to drop 17% for the cost of the house over the life time of a mortgae to be the same. to be the same.

So the market moving down by 8% in house prices is really the same as mortgage rates going up by 1%.
Happy to be proven wrong

SMF2

Um no not really. There are so many changing factors over time. My mortgage for 17 years was at different times a tracker/fixed/offset/variable/interest only with endowment/without endowment and the rates varied between 3.75% ( oh heady days) and 15%:eek:. Added to that the rates were up and down all over the place.
Calculating that would take forever but my overall discovery is that the more I can whack off the principal loan the better and the shorter the term ditto. That is precisely what I am now taking the opportunity to do.

pickledtink

PasturesNew wrote: »

5 years.
Why assume everybody will need a mortgage?
I will be paying cash.

Me too at this rate. Or near as.

PasturesNew

pickledtink wrote: »

... my overall discovery is that the more I can whack off ... the better

Great hobby

beingjdc

IveSeenTheLight wrote: »

But with mortgages being withdrawing every day, your going to see that you are getting only mortgages with much higher interest rates on your lower borrowed rate.

The trick is to get in on long term fixed rate as soon as possible

Interest rates will come down again in the long term. Buying in and fixing for the long term when both prices and rates are high is madness, I don't understand how this isn't obvious to you.

pickledtink

PasturesNew wrote: »

Great hobby

Dear heart!
I'm a lady! We don't whack off we palpitate in short breathes then faint in our corsets. *wavy finger icon which I cannot find right now*

mr.broderick

boinging wrote: »

Why is that a "sad state of affairs"?

You are a very shallow person if you think house ownership is a measure of personal success.

Ok sorry so how is it measured?
That really wasn'y my point, there are big noises on here who are constantly throwing their advice/views forward yet don't seem to have played things too great themselves..

PasturesNew

mr.broderick wrote: »

Ok sorry so how is it measured?
That really wasn'y my point, there are big noises on here who are constantly throwing their advice/views forward yet don't seem to have played things too great themselves..

I wish I could keep up and know who these big noises are, then I might be able to attach more meaning to what was being said.

My pennyworth: Everybody's playing a different game because there was only one pack of cards and we can't all have the aces first time round.

Sometimes if you appear to have made a false start, you can catch up later. If you fall at the first hurdle you can see how the others get round the course and work out what works/what doesn't and hope to be able to apply it next time.

Often people who have done well are sat on their thrones telling everybody that anybody can do it if only they worked harder/longer, etc.... but they don't realise that when the cards were handed out they just got the better deal.

Everybody has different experiences and expectations.

To me, the only measure of success is to not harm anybody along the way - and to help others where possible/